If you know how equity crowdfunding works, it’s time to answer the big question: Is equity crowdfunding right for your startup?
The following questions are those that equity investors will ask about your startup. See if your answers indicate your business is ready for equity crowdfunding and are you taking the right steps to start a crowdfunding campaign.
- Is your business at the right stage? Most equity investors are looking for proof of concept. Your startup business should have at least one product or service that’s already on the market and getting a positive reception. If your business is at the pre-revenue stage, then you might consider if you should wait till the business is more established.
- Have you raised funds before? Investors often look for past fundraising experience. That prior fundraising might only be a small friends-and-family round, or seed money from Enterprise Ireland or a LEO grant. Prior fundraising success is often a key metric that leads to crowdfunding success.
- Does your team have a track record? While it isn’t essential, equity investors do like to see proof the team is strong. Solid team credits could include working in key positions at a bigger firms. You may have been involved with other successful startups. All these elements help to settle the nerves of a potential investor.
- Is what you offer unique? If there’s one thing equity investors love, it’s ground breaking products and concepts.
- Can you wait for the money? Equity crowdfunding isn’t an instant process you can use to solve this week’s cash-flow crisis. It may seem counter-intuitive, but most equity fundraising is for money the company could survive without. Any whiff of desperation may send investors running.
- Do you have an exit? Equity investors are looking down the road to the day they can cash out and reap a return on their investment in your startup. They’re expecting at some point you’ll either raise more money, sell the company, or do an IPO. Do you have an exit strategy in mind.
If these questions showed your startup is at the right point to succeed in equity crowdfunding then talk to Spark Crowdfunding and we will help you to get your campaign under way. See our live campaigns here