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Crowd Funding Campaigns – How Planning Can Make All the Difference

Crowd Funding Campaigns – How Planning Can Make All the Difference

 

photo credit: Purpleslog

Crowd funding is a popular trend in the financial and business worlds that has been well known in Silicon Valley for quite some time. While the concepts of crowd funding are innovative, the opportunities created can be overshadowed by a lack of effective planning practices. The following are a few tips for planning a successful crowd funding campaign that will also be fully compliant to the standards of the Securities Exchange Commission:

Ask for the minimum – NOT the maximum: Asking for the maximum can present issues for entrepreneurs when using crowd funding programs like Kick Starter. Begin by asking for the minimum amount needed to successfully get off the ground. Additional funding can be sought out at a later date if needed.

Find the perfect time frame: Not too long and not too short: Give yourself adequate time to positively influence investors. While the past has shown that shorter crowd funding campaigns have a higher success rate, this is not referring to a matter of days but instead months as opposed to years.

Be credible and persuasive: To inspire investors, you must have tangible information for them to grasp. Be overly prepared, create financial statements that are in depth and understandable. Additionally, creating high quality materials explaining your venture and your business model, if done right, will serve you well. Remember, there are standards set forth by the Securities Exchange Commission and any unethical behavior is subject to their penalties.

Stay in contact with your investors: Send regular updates 1-2 times per month to your investors depending on your total time frame. Investors are offering up their own money to help you achieve your own goals; it is never acceptable to take their money and leave them up in the air regarding your progress.

Leave no stone unturned: Investors like to know all the details. You must have a well thought out and intricately researched plan concerning your business and the crowd funding you plan to seek. You will need to provide a business plan and financial statements to the Securities Exchange Commission in addition to your investors. Always be sure to represent yourself and your plans professionally and accurately. By maintaining ethical standards of business and keeping all of your information open and available for investors, the Securities Exchange Commission will be an ally in your venture.

Network, network, network: Past studies have actually shown that about 30% of crowd funding sources come from an individual’s own personal network. This means that family, friends, coworkers and colleagues can make all the difference between success and failure. Network early and network often, it will take time and preparation to inspire a network of fans and friends to become a network of investors.

Always be lawful and compliant: As with any financial transaction, there are rules and regulations set in place to protect entrepreneurs and investors alike. Be sure to be well versed in the JOBS Act as well as the crowd funding standards as set forth by the Securities Exchange Commission.

Crowd funding can be a tough subject to understand and while it can be tedious, having a full comprehension of the rules and regulations as well as what it takes to create a successful plan will make a positive impact on your crowd funding efforts. Here at Stock Connections, we are ready to help you develop a quality plan while also staying compliant with the Securities Exchange Commission and keeping potential investors happy. Contact us today for more information.

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