Campaigning for Your Equity Crowdfunding Offering: 5 Things Not to Do

pulling-togetherYour application to raise money has been approved, your business has completed due diligence, and your investment terms have been finalized. Now that you’ve cleared so many pre-campaign hurdles, it’s no time to sink your equity crowdfunding offering’s odds of getting funded.

Reaching your fundraising goal requires planning, commitment, hard work, and persistence. Your campaign will likely only run for few months, giving you a limited window of opportunity to meet your target. In that short timeframe, even just a few missteps can derail your offering quickly.

Importantly, some fundraising efforts that feel natural – especially for entrepreneurs more experienced with the capital raising process – can steer your campaign off course. Do your best to dodge these five potential landmines.

1. DON’T chase one big fish

If there’s a big-ticket investor in your rolodex who has the means (and potential interest) to fund your entire offering, you may be tempted to focus nearly all your energy on wooing him or her.

Resist the urge. If you pin your hopes on catching one big fish but fail to reel him in, your offering could tank. The key to equity crowdfunding is engaging with (and campaigning to) a broad range of potential investors – low-dollar and high-dollar – to cast the widest net possible.

Ten investors who commit $10,000 apiece to your offering are as valuable as one who drops as $100K. Spread your campaign energy around to investors big and small.

2. DON’T have a 506(b) mentality

Since the public advertising (or “general solicitation”) of investment opportunities was banned for more than 80 years, entrepreneurs and investors have long been accustomed to conducting the capital raising process privately.

But if you’re conducting a 506(c) General Solicitation offering, you can’t go about it with a 506(b) Private attitude. You need to embrace the public, online nature of the modern fundraising process and tell as many people about your offering as possible in pursuit of generating investor interest.

Invite all of your contacts to your offering and bring it up in every networking situation. It may feel unnatural to talk about your capital raise with customers or post about it on social media, but it’s important that you do.

3. DON’T put business in the backseat

Campaigning for your equity crowdfunding offering is a full-time job, to be sure. You need to place a massive amount energy – yours and your staff’s – into the marketing and PR needed to reach and convert investors.

But that doesn’t mean your day-to-day business can be put on the backburner. Especially if you’re in the very early growth stages of your company, you need to continue to generate business traction throughout your fundraise.

Corporate accomplishments that take place during your campaign will enhance the credibility of your company and give you more material to publicize to the media, driving traffic to your offering. Generate as many company milestones as you can during your campaign.

4. DON’T stick to stagnated strategies

Let’s say you made a solid campaign plan before launching your offering, complete with in-person networking, webinars, and email marketing. After a month of success with those strategies, your offering’s funding progress starts stalling. What do you do?

You can’t consider your best-laid plans set in stone. Some campaigns start experiencing a ‘dip’ in investor interest at some point in their offering timeline. Rather than use that as a time to panic about why your plans aren’t working, you should capitalize on the opportunity to try a few different strategies.

Refresh your campaign plans and reallocate your marketing budget if your offering’s momentum slows. It never hurts to try something new – say, online advertising, content marketing, or media outreach.

5. DON’T forget to say thanks

An investor you met weeks ago just invested $15,000 in your offering. Great news! But you were notified of the commitment via email during a meeting, then forget to get in touch. Is that a problem?

Not necessarily… but maybe. Sure, investors will get email updates about your campaign and their contributions. But keep in mind that you’re conducting an equity crowdfunding campaign, not rewards- or donation-based one. Every investor you forget to thank is now an owner in your company.

Is a lack of gratitude the first impression you want investors to have of you as a business owner? We didn’t think so. Open the lines of communication with your new investors right away, and say thanks.

How EarlyShares Expands the Reach of Your Equity Crowdfunding Campaign

When you raise funds for your business or project on EarlyShares.com, you’re not just posting your campaign for viewing by the investors on our platform. In fact, you’re exposing your equity crowdfunding offering to thousands (if not millions) of individuals on a major, high-traffic site thanks to EarlyShares’ presence on MarketWatch.com.

MarketWatch, published by Dow Jones & Co., is the web’s leading source for business news, personal finance information, real-time commentary, and investment tools and data. The site gets more than 16 million visitors per month.

EarlyShares’ partnership with Crowdnetic, a data provider serving the crowdfunding industry, enables our offerings to be published in real-time on MarketWatch’s industry-leading ‘Private Issuers Publicly Raising’ dashboard at marketwatch.com/investing/crowdnetic. MarketWatch is the first outlet to make private investment offerings publicly available on a major financial media website.

Investors can easily find EarlyShares’ offerings when they browse MarketWatch’s PIPR activity feed, search for issuers in their preferred industries, or screen for investment opportunities based on location, security type, pre-money valuation, or other criteria.

When your company comes up, investors can learn more about you and your fundraise just by clicking on your business name. They’ll be taken to a dedicated MarketWatch profile for your business featuring your most important issuer info. Check out the Crowdnetic profile for Kleo, a current EarlyShares project:

kleo-on-crowdnetic

And the distribution reach for your offering doesn’t stop with MarketWatch. Crowdnetic also operates Crowdwatch, a subscription service for investors focused exclusively on crowdfunding investment opportunities. Your EarlyShares offering information is automatically published to Crowdwatch as soon as you launch your campaign.

Best of all, this increased exposure to investors through MarketWatch and CrowdWatch comes at no extra cost to you. Any issuer conducting a general solicitation offering on our site is seamlessly featured on both platforms, increasing their probability of receiving funding. You don’t even have to create your business profile on either site – we handle transferring the information to our partner Crowdnetic.

For more details on EarlyShares’ partnership with Crowdnetic, click here.

Want to know more about the offering process? Check out our How to Raise Money section for tons of helpful info.

EarlyShares and GCVCA to team up for first-ever pitch event on April 30

gcvcaEarlyShares is transforming the private finance market by making investing a more engaging and interactive process. We’re primarily focused on doing that through our state-of-the-art technology, but this month we’ll be taking our online process ‘off-line’ to introduce South Florida investors to some of our accomplished entrepreneurs.

On Wednesday, April 30, we’ll be co-hosting ‘An Evening at the Omphoy’ with our friends at the Gold Coast Venture Capital Association (GCVCA). The event, which is set to take place at Omphoy Ocean Resort in Palm Beach at 5:30 pm EDT, will be our first entrepreneur-investor pitch event.

Several entrepreneurs who are currently hosting investment Offerings on EarlyShares will pitch their businesses to investors at the event. Scheduled to present are:

  • James Crane-Baker, Co-Founder & CEO of PsychSignal
  • Brian Garr, CEO of LinguaSys
  • James Rosenberg, Founder & CEO of Kleo
  • Andrew Sturner, Chairman & CEO of BoatSetter

One or two other entrepreneurs may present, as well.

If you qualify as an Accredited Investor, we hope you’ll join us at the event! (Registration is limited to Accredited Investors, GCVCA board members, GCVCA sponsor and co-sponsor firms, and the media.)

Sign up soon, because space is limited to the first 100 registrants. For more details or to register, click here.

The GCVCA is a not-for-profit corporation that provides information, association, and capital formation opportunities to the entrepreneurial community in South Florida. We participated in the GCVCA’s inaugural Expo in February and are excited to be facilitating another productive event for investors in the South Florida community.

Have any questions about the event, or interested in registering a group? Contact Nathan Smith of the GCVCA by clicking here.

Start-Up City: Miami showcases South Florida’s exciting entrepreneurial ecosystem

mike-jonesMiami’s known for a lot of things – among them sand, sun, and nightlife. Technology and entrepreneurship aren’t first to mind when people think of the Magic City, but that’s starting to change… and fast.

For proof, one only needed to step inside the New World Center on Miami Beach on March 31, which played host to the second annual Start-Up City: Miami event. The conference, hosted by The Atlantic and Atlantic Cities and co-sponsored by Miami’s Knight Foundation, brought together South Florida’s most accomplished executives, tech leaders, and business founders for conversations with some of the nation’s top startup thought leaders.

A full day of panel discussions, case studies, and presentations at the conference proved how much excitement our community has about entrepreneurship. And hand-in-hand with the vibrant startup activity here is a renewed interest in early-stage investing, spearheaded by EarlyShares and others.

“I’m very upbeat about Miami as a center of venture activity already,” said Joanna Schwartz, EarlyShares CEO, who spoke at the event. “People ask what needs to be done to become a tech hub, and I think we’re already doing it.”

Joanna Schwartz, CEO of EarlyShares, and colleagues on the 'Funding the Dream' panel

Joanna Schwartz, CEO of EarlyShares, and colleagues on the ‘Funding the Dream’ panel

Joanna’s panel on “Funding the Dream” addressed how, when, and where startups should draw funding – through venture capital, angel investment, or crowdfunding – to shift their young companies to the next level. Her co-panelists included Juan Pablo Cappello, Co-Founder of idea.me, Melissa Krinzman, Founder of Krillion Ventures, and Peter Kellner, Co-Founder of Endeavor Global.

“Funding the dream” is something several Miami companies have done with great success of late. Not only has BoatSetter, a collaborative boat rental marketplace, raised more than $1 million on EarlyShares, local startups LiveNinja and Open English were highlighted at Start-Up City for recently closing major funding rounds.

Impressive speakers from across the U.S. participated in the conference to help pinpoint what lessons Miami can learn from macro economic trends, major startup hubs like New York and Silicon Valley, and highly successful companies. They included, among others:

  • Richard Florida, Co-Founder and Editor at Large at The Atlantic Cities and author of The Rise of The Creative Class
  • Michael Jones, Creator of Google Earth and Chief Technology Advocate at Google
  • Ilan Zechory, Co-Founder of Rap Genius
  • Sam Altman, President of YCombinator
  • Paul Singh, Founder of Disruption Corporation and former Partner of 500 Startups

And while some of those speakers, particularly Altman, pointed out how far Miami has to go to be as strong a hub as Silicon Valley, a theme running throughout the day’s discussions was the massive amount of progress made in Miami’s startup environment since the first Start-Up City event in March 2013.

Over the past year, dozens of companies – including EarlyShares – have launched to the public. Additionally, the LAB Miami has significantly expanded its coworking space for entrepreneurs, the Knight Foundation has supported a wealth of entrepreneurship and economic development initiatives, and $300 million of venture capital has been invested in South Florida.

When building or launching a business, there are countless cities one could choose as a headquarters. But as one local entrepreneur, Michael Laas of LearnerNation, put it at Start-Up City, “Why not Miami?”

We couldn’t have said it better ourselves.

Perfecting Your Pitch: 3 Ways to Enhance Your Elevator Pitch & Captivate Investors

Elevator_pitch_EarlySharesIt’s every entrepreneur’s worst nightmare: the terrible pitch. You know a truly bad elevator pitch when you hear one – a shaky-voiced delivery full of “umms” and long pauses; an unprepared speaker stalling to remember details or fumbling standard questions; a monotone business owner droning on far, far too long.

But any entrepreneur who knows the basics of delivering an elevator pitch to investors (and who has at least some experience with public speaking) is unlikely to deliver an especially abysmal one. What’s more common is something you’ve certainly seen if you’ve ever attended a demo day or pitch contest: the perfectly average pitch. It’s the one that’s so mediocre that you forget the entrepreneur, business, and investment opportunity the moment the pitch is over.

Don’t let that happen to you. Pitching your business is all about grabbing investors’ attention, standing out from the crowd, and making your business seem like a remarkable and compelling opportunity. So even if you consider yourself a pitch-giving professional, consider the following ways to enhance, improve, and perfect your pitch to make it more captivating.

Tell a Great Story

The typical pitch can be roughly divided into four parts: a) the problem, b) the solution, c) the “where you are,” and d) the “where you’re going.”

But engaging your listeners is all about hooking them in to what you have to say. If your problem doesn’t impact them, your solution won’t captivate them, and your present and future won’t matter to them. That’s why you need to tell a good story – one that’s structured to engage every person in your audience.

Your business’ history is likely far less streamlined than you make it out to be in your pitch. But think about the great stories you’ve heard – in person, on the radio – that have really stayed with you. How many were linear a-b-c-d stories?

In your pitch, share your business’ unique history through a sense of plot. What has actually happened to you? What experiences led you to launch your business? What concerns caused you to pivot? What events have been your biggest breakthroughs? Those anecdotes will keep your audience intrigued and make you more memorable.

Speak like Yourself

When pitching to an audience, you might undergo a transformation from Usual You into Entrepreneur You. A common side effect of that transformation is a strong shift in the language you use.

You may think that using startup-tech buzzwords or complex terminology makes you seem more impressive to investors, but it often does the opposite. A pitch full of Silicon Valley-speak turns people off, and overusing industry jargon makes it sound as if you’re reading your business plan.

Don’t be afraid to speak as Usual You in your pitch. This doesn’t mean you need to “dumb down” your delivery so an eighth grader could understand it; you’re still addressing a sophisticated audience. Just keep it simple.

A straightforward pitch from a person using common vernacular is far more appealing to listeners than one delivered by an EntrepreneurBot. Model your pitch language after how you’d discuss your business over breakfast.

Boost Your Closing

A common pitch problem is an ineffective ending. Entrepreneurs who deliver the “inverted triangle” version of their businesses to investors – with all the important information shared first – often coast middlingly to the finish. And a closing of “please get in touch with me if you’re interested” doesn’t carry much weight.

Keep in mind that if you’re telling a good story (like we told you to), your audience will be engaged with you to the very end. That means you don’t have to share your most interesting or critical info up front.

Finish your pitch powerfully by saving some of your best material for last. Pinpoint at least one “wow” factor about your company or its traction – an impressive partnership, a major customer win, a big contract, a standout number – and hold onto it until you’ve delivered at least three quarters of your pitch.

Then go for gold by being direct about your investor opportunity. How could investors benefit from investing in you? Why should someone invest? Finish with a strong and compelling call to action that investors won’t soon forget.

What are your tips for a great pitch? Let us know in the comments.

Techweek100: Three EarlyShares VIPs Make List of Top Miami Tech Leaders

techweek100-earlyshares

EarlyShares’ home of Miami, FL is a buzzy hub of startup-tech activity these days. The city’s playing host to so many emerging companies and exciting events that some call our sunny metropolis the next big startup city.

EarlyShares is proud to be part of this vibrant startup community, which is why we’re honored to see ourselves on the Miami edition of the 2014 Techweek100 – a listing of the top South Florida leaders who are making an impact on business and technology in our region.

The Techweek100 includes managers of fast-growing technology companies, prominent investors, key enablers of the digital ecosystem, creators of new technologies, and other innovators that make important contributions to their fields.

Not only was our Co-Founder Maurice Lopes included on the list, but so were two executives at the helm of current issuer companies on our platform: James Rosenberg, Founder & CEO of Kleo and Brian Garr, CEO of LinguaSys.

Check out the full Techweek100 list here. And don’t forget to register for the eMerge Americas/Techweek Miami conference taking place here May 1-7, 2014. Just like our city’s other recent tech events – SIME MIA and Start-Up City: Miami, in particular – eMerge is sure to be an awesome gathering of Miami’s biggest and brightest thought leaders.

Build a Purposeful Business Plan with These 10 Pointers

Creating a business plan is an important step for any young business. Since drafting a plan requires putting the goals, growth plans, and marketing strategies of the business down on paper, it forces the business owner to think through many of the elements that can make the business more investor-ready.

But because it is so significant, creating a business plan from scratch can be an intimidating prospect.

Unsure where to start? Check out this insightful infographic from Washington State University. It not only shares why you need a business plan to begin with, but lays out ten essential considerations for outlining and writing a successful one.

On the EarlyShares platform, a company’s business plan is a major key to an investment offering’s performance. Our favorite advice from the WSU piece is to distinguish your business from competitors to enhance your odds of obtaining investment capital. In our experience, that’s critical.

After you read through the infographic, share your advice on building a great business plan with us in the comments. What pointers could you have used when creating your first business plan?

build-business-plan-infographic

EarlyShares CSO Talks Equity Crowdfunding for Digital Fundraising School

digital-fundraising-schoolWhat is ‘friendraising’? How do you conduct a ‘combination campaign’? What team members should your company have on board before you seek funding?

We could tell you the answers here on the blog… but we think you should hear them for yourself in a new podcast from one of EarlyShares’ experts.

Our Co-Founder & Chief Strategy Officer Heather Schwarz-Lopes has had a ton of speaking engagements of late – with recent gigs in DC and Miami – but we especially love her recent podcast for Digital Fundraising School. Heather gives listeners a clear explanation of equity crowdfunding that’s informative and helpful for newcomers and experienced fundraisers alike.

Take a listen below and be sure to check out Digital Fundraising School for more resources to help you get started with your own online fundraising campaign.

Crowdfunding Your Contacts: Why Your Network is Crucial to Your Fundraising Success

The JOBS Act changes are heralding a new era of crowdfunding, in which supporters of a company or project can become more than just backers – they can become owners. The new capital raising opportunities under the Act are game-changers for both investors and entrepreneurs.

But while “equity crowdfunding” differs significantly from traditional rewards- and donation-based crowdfunding, one aspect is the same for both: the fundamental importance of the project owner’s existing network.

In order for any ‘crowd’ fundraising campaign – rewards and equity alike – to succeed, the head of the project must motivate his or her network and drive support and investments from friends, family, and colleagues.

network-degrees

Mis-CROWD-ceptions

Rewards-based crowdfunding has become a mainstream concept thanks to the popularity of platforms like Kickstarter and Indiegogo. But ask someone on the street about crowdfunding and he or she is likely to recall the biggest, boldest campaigns to date – the ones that garnered widespread public interest and tons of funding: the Pebble Smartwatch project that raised $10 million; the Veronica Mars film that surpassed its $2 million funding goal in a mere 10 hours and went on to raise more than $5.7 million.

The high-profile, viral nature of those and other major campaigns has led some outsiders to view crowdfunding as a means for easy money… and that couldn’t be further from the truth.

“I think that’s the misconception going into crowdfunding, that you think the crowd is going to be on your side,” says Vann Alexandra Daly, a filmmaker and consultant who’s been called the ‘crowdsorceress’ for her expertise managing crowdfunding campaigns.

Anonymous donations from strangers may be how Pebble and Veronica Mars raised millions, but the truth is that those boldface projects are the exception rather than the rule. The average successful rewards crowdfunding campaign, according to data published in the Wall Street Journal, raises less than $10,000. And successful campaigners (like Daly and others) point out that motivating their networks to support a crowdfunding project is key to that project’s success.

Consider U-Doodle, a Miami-based non-profit that successfully raised $10,000 on Indiegogo in December 2013.

“I’d say we knew or interacted with 80 percent of our funders,” says Jordan Magid, Co-Founder of U-Doodle. “And getting contributions from our closest friends and colleagues was critical to gaining momentum.”

That’s the key – getting members of your network that you already know to contribute, and turning newcomers into members of your network through one-to-one communication and relationship building. And that key unlocks both rewards crowdfunding campaigns and equity crowdfunding offerings.

General Solicitation Lessons

When approaching EarlyShares about conducting a potential General Solicitation equity offering to accredited investors – presently the only option for an equity crowdfunding campaign – many entrepreneurs expect the public, online nature of the process to do the work of fundraising for them.

Of course, the ability to publicly advertise investment opportunities significantly increases the potential for offerings on EarlyShares to ‘go viral’ and attract investors the issuer did not previously know. We encourage every issuer to utilize their online marketing options as much as possible and incorporate PR and social media into the fundraising strategy.

But the concept of knowing – or getting to know – ‘80 percent’ of your funders still applies. We recommend that issuers strategize to raise 40-50 percent of their funds from 1st degree contacts (friends, family, close colleagues) and 30-40 percent from 2nd degree contacts (friends-of-friends and acquaintances). That leaves 20-30 percent to come from broader connections and the crowd.

Importantly, reaching and converting investors in each tier of your network involves a lot of campaigning… and online marketing isn’t enough. To fund your campaign successfully, you’ll need to conduct personalized outreach to all interested investors, send frequent updates to your extended networks, and do lots of in-person networking.

That’s another thing that applies to both rewards and equity crowdfunding: it’s hard work.

“It’s a full-time job,” says Daly of crowdfunding. “Every day of the campaign is important.”

The EarlyShares THREE-FREE-TEE Promotion: Refer three for a free t-shirt!

We’re pretty good at designing t-shirts here at EarlyShares (according to Business Insider, that is). Do you want our next one?

All you have to do to get a ‘free tee’ from EarlyShares is refer three investor friends to our platform between now and March 31. We’re calling it THREE-FREE-TEE. Here are the rules:

  1. You must use the ‘Invite friends’ tool in your EarlyShares Dashboard to refer your friends. Just log in to your account and click ‘Invite friends’ under ‘What can I do now?’
    Invite-friends
    Once you click the button, you’ll see a pop-up with your invitation options. (We recommend copying & pasting your friends’ info under Option 1.) You might want to add a personal note to the text box asking your contacts to sign up and complete the investor registration process, because…
  2. Three referrals must accept your invitation to sign up for EarlyShares and must register as investors in order for you to receive your t-shirt. You can invite as many friends as you like, so you may want to cast a wide net for the greatest odds that three of your referrals sign up.

That’s it! We’ll monitor sign-ups through our platform to know who is eligible to win a free tee and email you if three or more of your referrals register. Keep an eye on your inbox because we may need your address.

Have questions or want to check on your entry? Email info@earlyshares.com. We look forward to outfitting you in original EarlyShares gear!