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5 Tips on Crowdfunding for Your Business

5 Tips on Crowdfunding for Your Business

Crowdfunding

Crowdfunding can help your business.

Starting a business or kick-starting a dream can be an intimidating feat, but with new concepts in investing like crowd funding, the idea of success can be much less daunting. Entrepreneurs have a great opportunity with the concept of crowd funding but to ensure a positive experience with investors must be cautious and careful with their dealings.

What is crowd funding:  Crowd funding involves asking for monetary donations from groups of individuals who will become investors in a business or project. Crowd funding can be a fast and efficient way to gain capital and there are three forms of funding, equity, donation and debt, all of which can be very effective means in gaining investors.

When gaining these investors it is important to take care in the dealings and planning. With crowd funding becoming such a popular and effective method, investor relations are more important than ever. To ensure a quality experience, follow a few of our tips for staying positively active in crowd funding situations.

  • Be open without being aggressive: We have all been to networking events and business dinners where one person talks for hours about their ideas, their ventures and their plans.  Don’t be overwhelmingly adamant on convincing other’s to see your vision if it does not intrigue them naturally. A negative attitude could steer other investors away from your project. 
  • Allow investors to invest what they can afford: There are many times that your investors will be people who are close to you and with any investment, there is risk. For that reason, do not push individuals to invest more than they are comfortable with. If the business or project fails and the money is lost, it could affect your professional relationships and put your personal relationships in jeopardy as well.
  • Follow all appropriate laws and rules: Crowd funding has a specific set of laws that must be followed by entrepreneurs and investors alike. Make sure you are aware of the standards and the guidelines that you must abide by. Use all available resources and take all the help you can get. This includes resources like the Crowd Funding Regulatory Intermediary Advocates and the Crowd Funding Professional Association.
  • Plan ahead: With an increase in investors comes an increase in communications and it is imperative to take care in planning for the larger volume of emails, calls and general communication that will surely occur in the future.
  • Stay in contact: Constant contact is important when dealing with a large number of investors. Be in constant communication via email or phone and be open with your investors concerning both positive and negative situations that could impact their investments.

While crowd funding is a new and exciting form of enticing investors, it is important to consider all the ways to maintain positive investor relations. Follow these tips and tricks and your experience with crowd funding should be quite positive.

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