To have a successful business in this industry you have to consult a professional. Through exempting the companies raising $1 million and below from registering their offering with the SCE, the Crowd fund Act is making the efforts of lowering the cost of raising capital. But being exempted from registration does not mean a company is exempted from regulation. Before embarking on any crowd funding venture, it's advisable to consult with an attorney versed in securities law or with a professional investment consultant
Get informed about the two types of crowd funding. In the past only donations or pledges could be raised on crowd funding sites. Today options have been expanded by the Crowd fund Act and this allows the entrepreneurs to seek up to $1 million investments annually through the industry websites. These investors actually own a piece of the company unlike the donors. With the success of the company, these investors can realize a return on their investments.
Don't be in haste. The SEC regulations regarding this business investments and no accredited investors has been set but the process for raising donations remains still the same. You can raise funds from accredited investors, whose net worth is above $1 million, excluding the value of their primary residence. At the same time you can solicit non accredited investors.
The crowd funding site of your choice should meet the Crowd fund's Act Requirements. Choose to solicit your investments through sites that are registered with SEC. A background check should be conducted on the companies seeking investment and investors should be screened in order to confirm they understand the risks involved.
In-cases where donations are being raised, the fund raising pitch should focus on emotions. The donors should be excited about the business, the product/ service and the entrepreneurial passion. Before crowd funding investments, the capability of investors on making money should be the main focus. This market is full of scam artists and therefore proper caution should be taken about anyone asking for a fee to help in raising capital.
Create compelling pitch videos to make your company stand out from the pack. Make videos both for donors and investors. To increase your chances of going viral, post the videos on both your site and then you tube. The SEC regulates on communication with investors. Keep the donors updated on your progress regularly. Besides keeping them updated on the progress of your product/service, give them any other news that makes them feel part of your success.
Profit is what investors get as a reward but for donors, rewards like product samples, discounts and promotional items should be given to them. Don't limit your search for funds; an integrated marketing campaign should be created to inform people you are looking for funds
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