How to Find Investors for Your Equity Crowdfunding Campaign: 3 Quick Tips
For the most part, media coverage of equity crowdfunding tends to focus on successful campaigns and the apparent ease by which these have reached their goals. While all of this brings welcome attention to equity crowdfunding, the tendency is that it also overshadows all the hard work and intense marketing efforts that went into those projects and veils them from the popular view.
What follows is an increasingly common mentality among campaign hopefuls: that “if you build it, they will come.” Anybody who has been in the industry long enough, however, knows that not only is this mindset patently false, it’s detrimental to the potential success of any campaign. The fact of the matter is nobody will come unless you do something about it, most of the time – yes, even if you have a ground-breaking idea in your hands.
This cannot be said enough: finding investors for crowdfunded campaigns is no less complicated than doing it under the traditional venture capitalist structure or through bank finance. It is true that in one sense, it is easier since you have broader reach through social media and the internet; on another, it’s actually harder since you have more people to convince than ever before.
However, it’s also a mistake to assume that the means for finding investors for your equity crowdfunding campaign is no different from those used under traditional funding vehicles. If you’re planning on launching your own equity crowdfunding campaign, here are three quick tips you can try that will help you find investors willing to fund your project:
Identify Your Investor
Not everyone that comes across your campaign will be an investor, but there’s a good chance that some of them might if you get them interested enough with your idea or your offer.
That’s easier said than done, however. To hit your target, you have to know the people that you want to reach and if you're able to reach them. You have to consider, for example, that the majority of people who have access to crowdfunding sites at this point are 24-35-year-olds who are predominantly male and have earnings of over 90,000EUR. Do you think your product will appeal to this primary demographic? Are you at least able to make it palatable to them through proper advertising and rewards?
Know Where to Find Them
Are you even able to reach them with the channels currently available to you? Remember that you’re not the only one with goals or targets to reach. It’s important that the idea that you get in front of your audience resonates with their goals. If you’re doing equity crowdfunding, you’re probably dealing with people who are looking for “the next big thing” or people seeking significant ROIs for their investments. Are you confident that you’re able to meet at least their most basic expectations?
Knowing your investors, their priorities, and where to find them means greater ability on your part to pull in much-needed conversions to your campaign at a shorter amount of time. As a rule, the quality of the investors you find will ultimately depend to a great extent on your ability to target the right people at the right places.
Grow Your Crowd Online and Offline
Another common mistake that campaigners commit, however, is assuming that since they’re crowdfunding, “the right places” could only be online, and so miss many opportunities for conversions in the process. While it is true that the majority of the marketing efforts that you’re going to make will be dedicated to online platforms and targeting your ideal investors from there, nothing is stopping you from targeting people who qualify as your ideal investors offline.
People often take to their own personal social media and tell their friends and family about their campaigns there. Most people, however, stop there and never consider reaching out to their entrepreneurial communities of their cities or their industry friends. And only a fraction of those people think about reaching out to actual venture capitalists who are thinking of diversifying into equity crowdfunding.
Note that doing the latter doesn’t mean that you have to launch a separate campaign targeting venture capitalists on top of your crowdfunding, which is ill-advised – due to considerations of time and cost – though hardly illegal. It only means looking for VCs who are willing to diversify their portfolios through your campaign. If you’re looking to enlist accredited investors on your campaign, going to investor conventions or joining angel investor networks and forums online can help you spot them more easily.
There’s no such thing as a shortcut to legitimate and long-lasting success. It may sound cliché, but it takes dedication to your idea and a whole lot of hard work to make your dream a reality. In that sense, equity crowdfunding is no different from traditional investment vehicles. However, if you find the right people and do it right, equity crowdfunding can make for some gratifying rewards that will benefit your business and enrich people’s lives.