A recent article in crowdfund insider discussed different rules for crowdfunding success. Crowdfunding is a relatively new method for startups to build capital where the general public can invest in a company and gain equity. This method of funding developed so that entrepreneurs could reach a wider audience to raise money in the early stages of development. Crowdfund insider lays out six rules that a startup entrepreneur should be aware of if they decide to use the crowdfunding method for further support.
The first rule is to engage in the investor community. Entrepreneurs need to be present and easily reachable through social media. Research shows that entrepreneurs who are socially active in the investor community are able to attract more investors.
The next rule is every entrepreneur needs to have proof of concept. Having an idea will not obtain any entrepreneurs any investment. They have to have some sort of advancement in their product to prove that the product can be turned into a business. Whether it is sales numbers, awards, or partners signed on, there needs to be something more than just an idea to add to the credibility of the product.
Rule number three is to value your company at a price that isn’t too greedy or too humble. Investors pay attention to the entrepreneur’s valuation to evaluate the kind of entrepreneur that they are. The valuation acts as a self-imposed forecast to how their business will scale.
Next on the list is passion. An entrepreneur must be passionate about the product that they are putting forth. This will show that they are willing to work hard and put the effort into making their company successful. Passion also helps build a strong employee base as passion becomes contagious.
A unique selling proposition is one of the first aspects of a company that an investor looks at. The entrepreneur needs a clear vision as to how the company will succeed and deliver that message in a clear and succinct manner.
Last but not least, if an entrepreneur want’s to gain attention in the crowdfunding community, they need to have a video to tell their company and product story. The video acts as a resume and cover letter for a job; it is the first entry point to an investor. This is where the entrepreneur can clearly display their product, lay out their business plan, and pitch their vision. This is also the platform where entrepreneurs will show their personality and passion for the company as investors watch and make a preliminary judgment.
You can read these tips in more detail from the article itself posted here.