Equity Crowdfunding is giving promising young companies a chance to raise money from the crowd in a whole new way. Ever heard of it? If not, think of it like a Kickstarter campaign, but instead of a physical reward, people get shares of your company.
Sound too good to be true? It’s absolutely real: you can now sell shares of your business to almost anyone, as long as you’re incorporated, your head office is in a participating jurisdiction, you have a business plan, and you’re not doing anything illegal. You also have to raise your funds on a secure equity crowdfunding portal. Securities regulators set the rules for exactly how you can raise money.
How does Equity Crowdfunding Work?
To raise any money with equity crowdfunding, you have to be totally transparent about your company’s performance and finances. This is a marketplace where the crowd gets to know everything about your business so they can make an educated decision to invest in you – or not. So if you don’t have a business plan, now’s the time to write one. If you’ve been slacking on ANY filings or taxes, catch up.
There’s an important legal component too; a securities lawyer can ensure your corporate documents are in order and help you structure your equity crowdfunding offer, including the type and price of shares. There are actually quite a few legal considerations to be made before you launch an equity crowdfunding campaign, so you must connect with a good lawyer. Yes, it costs money and no, it’s not the most exciting part of your campaign, but you absolutely have to do this part. It’s non-negotiable.
Once all the housekeeping’s done, you can choose a platform to showcase your company and your equity offer. Look for a portal that offers a lot of resources to help you mount a successful campaign. Just like Kickstarter, you have to have a great marketing campaign to make sure investors know about your offer, so the more support you can get from the platform, the better.
If it seems like everywhere you look, doors are slamming and you just can’t get the money you need to grow your business, equity crowdfunding might be your answer.
Download your guide to prepping your business for Equity Crowdfunding
When Jessica set out to learn everything she could about equity crowdfunding, she found a lot of fragmented and incomplete information that was hard for the average business owner to absorb. Seeing the need for a complete overview of equity crowdfunding, Jessica sought experts from around the world to help her create one of the first totally free, simple and concise guides to equity crowdfunding in North America specifically.
That’s why experienced business plan writer and start-up coach Jessica Oman, founder of Renegade Planner, has released a free Ultimate Guide to Prepping Your Business for Equity Crowdfunding to help more business owners learn about this exciting opportunity.