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Equity Crowdfunding: Is It a Good Funding Option for Your Startup?

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There's a lot of buzz about crowdfunding these days, but is seeking money from the crowd the right path for your company? Do you know how it really works? And how can you increase your odds of building a successful campaign?

Before you give up a percentage of ownership in your company through equity crowdfunding, check out this presentation from Ventureneer (www.ventureneer.com) presented by Early Growth Financial Services (www.earlygrowthfinancialservices.com) for an in-depth look at:

- Crowdfinancing misconceptions
- What you need to know about Reg A+
- Reward-based crowdfunding vs equity crowdfunding
- How to run a successful equity crowdfunding campaign
- Preparing your company for crowdfunding
- Finding the best crowdfunding platform for your company
- And more...!

Published in: Career

Equity Crowdfunding: Is It a Good Funding Option for Your Startup?

  1. 1. Equity Crowdfunding: Is It a Good Funding Option for Your Startup? Geri Stengel, President / Ventureneer 8.12.2015
  2. 2. EQUITY CROWDFUNDING: IS IT A GOOD FUNDING OPTION FOR YOUR STARTUP? ● What and why ● Just the facts, ma’am ● Give it to me straight ● What’s it take to succeed ● Both sides of the equation ● Resources 2
  3. 3. What Is Equity Crowdfunding? Regulation D of Title II of the JOBS Act ● 506(b) ● 506 (c) ● Title III, still to come
  4. 4. Why Equity Crowdfunding? ● Centralizes ● Streamlines ● Simplifies ● Shortens the fundraising process
  5. 5. JUST THE FACTS, MA’AM 5
  6. 6. Equity Crowdfunding Is In Its Infancy Venture Capital Angel Investments $48 Billion Real world $24 Billion Crowdfunding $.5 Billion Source: MoneyTree, Center for Venture Research and Crowdnetic for 2014
  7. 7. Success Rate Among Entrepreneurs Seeking Angel Investments Real World 19% Crowdfunding 24%
  8. 8. Top 10 Cities for Equity Crowdfunding
  9. 9. GIVE IT TO ME STRAIGHT 9
  10. 10. Misconceptions Cloud Equity Crowdfunding Reality ● Verifying accreditation ● Managing investors is complicated ● Financial reporting ● Expensive ● Venture Capitalists diss crowdfunding ● If you build it, they will come ● Social media outreach will make your campaign go viral and the rest, as they say is history Photo credit: Flickr, Faungg's Photos, Cloudy Mountain
  11. 11. The Ugly of Crowdfunding Photo Credit: Flickr, Tambako The Jaguar, «I'm ugly, and?»
  12. 12. Equity Crowdfunding: To Carpe Diem or Not Photo credit: Flickr, Hamish Darby, kasplosh ● A large market ● Solving a major pain-point ● Defensible competitive advantage ● An exit ● A great team
  13. 13. Fundraising: No One Size Fits All ● 506(b) ● 506(c) ● Offline ● Rewards Photo credit: Flickr, David Goehring, Emptily Nested
  14. 14. Choosing an Equity Crowdfunding Platform ● Compensation ● Deal structure ● Due diligence ● Exclusivity ● Minimums and maximums ● Products ● Regulation compliance ● Regulatory Profile ● Self service vs. full service ● Stage of company ● Syndicates ● Tools ● Track record ● Value added
  15. 15. Success Stories Wonder Technologies Crowdfunder Committed: $800,000 Digitzs Crowdfunder Committed: $2 million ONEVEST Onevest Committed: $2 million Le Grand Courtage CircleUp Raised: $400,000 Good Clean Love CircleUp Raised: $400,000 Smarty Pants Vitamins CircleUp Raised in 2 rounds: $4.7 million
  16. 16. The Benefits of Leading With a Rewards-Based Crowdfunding ● Debt and Equity free ● Market research ● Social proof ● Validation ● Customer engagement ● Marketing
  17. 17. Use Rewards-Based Crowdfunding as a Stepping Stone Other Company Machine Kickstarter Goal: $50,000 Raised: $312,000 VROU Plum Alley Goal: $30,000 Raised: $32,000 Thinx Kickstarter Goal: $50,000 Raised: $65,000 Indiegogo Goal: $10,000 Raised: $19,000 Website $25,000 TOTAL: $110,000 Real Food Blends Indiegogo Goal: $10,000 Raised: $16,000 Bumbleroot Indiegogo Goal: $9,000 Raised: $10,000
  18. 18. WHAT’S IT TAKE TO SUCCEED 18
  19. 19. Equity Crowdfunding Pointers ● Build your network before you need it ● Get organized ● Segment network, target appropriately ● Communicate clearly ● Focus on solving a pain point ● Highlight the skills of the team ● Make a compelling video ● Emphasize traction: customers, partners, media mentions, etc. ● Show momentum ● Reach out often using different ● Make the ask and ignore rejection ● Attend to details Photo credit: Flickr, Anonymous Account, Where
  20. 20. Skills Required ● Organized, diligent ● Marketer ● Story teller ● Clear communicator ● Realistic projections ● Aligns words with actions ● Frank when mistakes happen ● Good follow up Photo credit: Flickr, Bob Bob, Getting airtime in the women's boarder cross at The Brits 2010 at Laax, Switzerland
  21. 21. BOTH SIDES OF THE EQUATION 21
  22. 22. What’s in It for the Investor? ● Make a profit ● Apply their own skills and experiences ● Give back ● Participate actively in investing ● Join boards of directors, especially true for women ● Finding like-minded people to invest in – values driven Photo credit: Flickr, Simon Cunningham, Return on Investment
  23. 23. Why Angels Like Crowdfunding Platforms ● Increased deal flow ● Curated deals ● Centralized/convenient ● Transparency ● Streamlines process ● Saves time ● Diversifies portfolio ● Learn from others
  24. 24. RESOURCES 24
  25. 25. Resources ● Stand Out In the Crowd: How Women (and Men) Benefit From Equity Crowdfunding ● All Geri Stengel’s articles on crowdfinance ● 6 Common Misconceptions About Equity Crowdfunding ● How to Ensure a Successful Crowdfunding Campaign ● 5 Secrets to a Successful Equity Crowdfunding Campaign ● Study Reveals Secrets to a Successful Crowdfunding Campaign ● Going For it through Crowdfunding ● Women vs. Men: Who’s Better at Crowdfunding? ● How Crowdfunding Is Closing The Funding Gap for Female Founders
  26. 26. Questions
  27. 27. STAND OUT IN THE CROWD: How Women (and Men) Benefit From Equity Crowdfunding THANK YOU Follow on Twitter: https://twitter.com/Ventureneer Like on Facebook: https://www.facebook.com/Ventureneer Join on Google+: https://plus.google.com/+GeriStengel/posts Visit Ventureneer: http://ventureneer.com Early Growth Financial Services Follow on Twitter: @EarlyGrowthFS Like on Facebook: https://www.facebook.com/EarlthGrowthFS Visit Early Growth Financial Services: http://www.earlygrowthfinancialservices.com

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