F O R S TA RT U P E N T R E P R E N E U R S

CROWDFUNDING TIPS

CROWDFUNDING

Crowdfunding is a relatively new method for startups to build capital where almost anyone can invest in a

company and gain equity. This method of funding developed so that

entrepreneurs could reach a wider audience to raise money in the early stages of development. Crowdfund

insider lays out six rules that a startup entrepreneur should be aware of if they decide to use the crowdfunding method

for further support.

RULE #1

The first rule is to engage in the investor community. Entrepreneurs

need to be present and easily reachable through social media. Research shows

that entrepreneurs who are socially active in the investor community are

able to attract more investors.

RULE #2

The next rule is every entrepreneur needs to have proof of concept. Having an idea will not

obtain any entrepreneurs any investment. They have to have some sort of advancement in their product to prove that the product can be turned into a business. Whether it is sales

numbers, awards, or partners signed on, there needs to be something more than just an idea

to add to the credibility of the product.

RULE #3

Rule number three is to value your company at a price that isn’t too greedy or too humble. Investors pay attention to the entrepreneur’s valuation to evaluate the kind of entrepreneur

that they are. The valuation acts as a self-imposed forecast to how their business will

scale.

RULE #4

Next on the list is passion. An entrepreneur must be passionate about the product that they are putting forth. This will show that they are willing to work hard and put the

effort into making their company successful. Passion also helps build a strong employee

base as passion becomes contagious.

RULE #5

A unique selling proposition is one of the first aspects of a company that an

investor looks at. The entrepreneur needs a clear vision as to how the

company will succeed and deliver that message in a clear and succinct

manner.

RULE #6

Last but not least, if an entrepreneur want’s to gain attention in the crowdfunding community, they need to have a video to tell their company and product story.

The video acts as a resume and cover letter for a job; it is the first entry point to an investor. This is where the entrepreneur can clearly display their product, lay out their business plan, and pitch their vision. This is also

the platform where entrepreneurs will show their personality and passion for the company as investors

watch and make a preliminary judgment.