5 Quintessential Steps to Transform Your Idea into a Booming Business with Equity Crowdfunding
Out of all the wisdom that has built Western Civilization from the ground up, it’s probably “You reap what you sow” that is the most practical, and one that still applies almost readily today. It teaches that we all make investments regularly and that in due course, we will get a return. In that sense, it’s the central philosophy behind crowdfunding: the quality of your investment determines the quality of your returns.
That being said, one of the most common mistakes of equity crowdfunding campaign sponsors is to assume that investments are wholly on one side of the equation. They forget that it takes more than just an idea from their end to have a successful crowdfunding campaign, and this applies to all investment vehicles.
In a manner of speaking, you have to plant an idea, water it, and do everything necessary to make it grow. It takes effort on your part and investments, whether monetary, in kind, or of time.
This begs the question: if you’re planning to launch your own equity crowdfunding campaign, how much are you willing to invest? How much time are you willing to give to make this happen? On top of that, you can’t just invest however you want; there’s a nuance to the process and steps that you need to take to make sure that your idea is on track to becoming a profitable business by the end of your campaign:
Determine Whether Your Idea is a Good Idea
The thing about business ideas is, they aren’t all created equal. The quality of your idea can make or break your equity crowdfunding campaign. It doesn’t matter whether you firmly believe in your idea, either; at the end of the day, it’s the best ideas that will find support from people, and campaigns that begin with ideas that are subpar or just downright uninteresting ultimately end in failure.
Before launching your campaign, we highly recommend reading this article to help you determine whether or not your idea is ripe to be crowdfunded.
Do Your Research
One of the things that you need to invest your time in is research on multiple aspects of your campaign. Research equips you with the knowledge necessary to steer your campaign toward a profitable direction. For example, research can help you make better-informed decisions when you know who you are more likely to reach with your campaign and how best to reach them. It also allows you to have a grasp on the market-readiness of the company you’re trying to crowdfund by providing insight through current trends and demand for particular products or services.
Simply put, it makes your job easier by improving your ability to target audiences and prevents you from launching campaigns doomed from the start due to lack of interest.
Since crowdfunding relies on the contributions of multiple small investors – over against the single lump sum investments of a select few investors – your goal is to make your campaign as findable as possible. Often, this means marketing using all the channels that are available to you, including social media marketing, getting featured on different platforms across the internet, and, if possible, even print advertising.
It’s important to note that the majority of your marketing efforts should begin before your campaign launches. One way to do this is to create a brief but highly shareable video showing potential backers the particulars of your campaign and what benefits they could get out of it upon their participation. Remember that the goal is to have as many backers as possible by the first week of your campaign since interest on your project generally dies down from that point forward.
Don’t Leave Your Audience Hanging
If you’ve managed to get past the crucial first stages of your campaign, you have to invest a significant amount of time on your audience. Often, this requires communicating with them regularly with updates on the progress of the campaign. It is not uncommon for startup investors to have fear, uncertainty, and doubt (FUD) over the status of their investments, and the last thing they need is you keeping them in the dark.
All successful equity crowdfunding campaigns that turned into businesses afterwards have this in common: they followed through on their promises by the end of their campaigns. No matter how large of a following you build, you will lose all that once you lose credibility, which you lose if you fail to follow through. In equity crowdfunding, this means following through on your payouts consistently. Keep in mind that once you lose your audience’s trust, you lose everything. If you fail to follow through on one project, you lose credibility for all your current and future projects, so be sure only to make promises that you can keep.