Tag Archives: crowdfunding

Crowdfunding For Equity: Title III and Equity Crowd Funding 101

Business Plans and Crowdfunding

Crowdfunding For Equity: Title III and Equity Crowd Funding 101

What is Equity Crowdfunding?

Equity crowdfunding is on the rise after the signing of the Jumpstart Our Business Startups (JOBS) Act was signed by President Obama in April 2012.

Simply put, it is a type of crowdfunding that enables broad groups of investors to fund startup companies and small businesses in return for equity.

Three years after the JOBS Act was initially passed, Title IV (Regulation A+) went into effect, allowing larger companies to accept capital from both accredited investors (the wealthiest 2% of Americans) and non-accredited investors (the other 98% of Americans). This expanded when Title III (Regulation CF) was enacted in October 2015, which also allowed early stage companies to accept capital from both accredited and non-accredited investors.

More About Title III (Reg CF)

Title III allows startups and small businesses to raise up to $1M from the general public – an unprecedented way to raise capital. More specifically, investors who have less than $100,000 in both income and net worth may invest at least $2,000 per year, and as much as 5 percent of their income or net worth (whichever is less) per year.

Investors whose income or net worth is greater than $100,000 may invest up to 10 percent of their income or net worth (whichever is less) per year.

Thus, Title III gives companies that are historically underserved by the current capital markets an equal opportunity to equity financing.

On May 16th, Title III will officially go into effect.

Process

Choosing a Funding Portal

Under Title III, companies must use an online intermediary (either a broker-
dealer or crowdfunding portal registered with the SEC and FINRA), to facilitate a
fundraise. Experienced portals with a deep understanding of the regulations
surrounding Reg CF can help ensure that their campaigns are compliant with SEC rules.

Filing a Form C

Companies raising under Title III do not need to get SEC approval to initiate their
raise. They must, however, prepare a Form C and file it with the SEC 21 days prior to launching an offering. This form includes basic information about the company, its employees and the terms of the raise.

Disclosure Requirements – Financial Information

In addition to Form C, necessary financial information will depend on the size of
the intended investment needs:

 Under $100k – Internal financial statement review

 $100k-500k – CPA reviewed financial statements

 500k-1M – 3rd Party audited financial statements

 1st time crowdfunding issuers offering more than $500,000 would be permitted to provide reviewed, rather than audited, financial statements.

 Disclosure Requirements – Ongoing Reporting

Providing progress reports not only build trust with investors and keep them informed, but they’re also a very much required part of the disclosure requirements. Upon the successful closure of your campaign, you will be required to provide ongoing updates to your investors in the form of an annual report, which will include similar information that was included on the Form C.

In summary, what are the benefits and pitfalls of Title III?

Benefits:

 Title III can be an efficient way to quickly startups raise capital from the crowd

 More investors equate to more supporters in your startup

 Reporting requirements give founders and investors an opportunity to

Pitfalls:

 Current statutory disclosure obligations and costs are overly burdensome

 Legal and accounting fees may be higher than traditional capital-raising

 Title III does not include a “testing the waters” provision (like Reg A+ maintain a more open and transparent dialogue methods does) so that issuers can gauge interest before incurring burdensome filing and preparation costs

Remember, Regulation CF will become effective 180 days after the final rules are published in
the Federal Register on May 16, 2016.

If you have a question about your equity crowdfunding for your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Furry Innovation: Pets Are Startup Businesses New Best Friends

Furry Innovation: Pets Are Startup Businesses New Best Friends

It’s no denying it, we love our pets and we’re willing to spend countless amounts of money in order to enhance their health, happiness, and even appearance.

According to the American Pet Products Association an estimated $58.5 billion was spent on pets in 2014. With nearly $330 million on pet costumes for Halloween alone.

From OnDemand Pet Adoptions to “Furspray” the newest way to decorate your pet for special occasions, Pet Startups combine the love of animals with a high-growth business opportunity. However, along with business opportunities comes fierce competition.

Currently listed on Angel List, there are 490 Pet Startups with an average valuation of $3.7 million across a pool 1,012 Investors. Leading the pack and setting the investment stage are DogVacay and Bark&Co.

DogVacay offers an on demand approach to petsitting near home, having securing 4 healthy funding infusions since 2012. Including: $1 million dollar seed round in May 2012, $6 million Series A round in Nov. 2012, $15 million dollar Series B round in Oct. 2013, and $25 million in Oct 2014.

Bark & Co. leveraged an untapped business model of a monthly subscription box of dog goodies with BarkBox and continued to expand across several other major properties:

BarkPost: Your daily dose of doggy news
BarkShop: Spoil your pup with the very best
BarkBuddy: Find fluffy adoptable singles in your area
BarkLive: Amazing experiences for you and your dog

Also securing a steady funding infusion including: $25,000 in Jan 2012, $1.7million in July 2012, $5million Series A round in April 2013, and $15million Series B Round in July 2014.

Funding is so red hot for Pets Startups, if the U.S. pet products industry collectively was a Fortune 500 company, it would be bigger than Google, Dell, UPS, or Coca-Cola.

Meanwhile, like any high-growth industry, it’s attracting a new breed of startup entrepreneurs with furry ambitions.

Here are a few “underdogs” that captured our attention here at The Startup Up Garage.

XcDogs: Based out of Jackson Hole, Wyoming, and it connects people who travel with their pets to locals willing to pet-sit short-term who is actively seeking funding at this time.

CleverPet: a local San Diego Startup which with a “Smart” pet gadget that educates and interacts with your animal companion in your absence. CleverPet had a successfully funded Kickstarter campaign of $180,623 and appears to have a variety of undisclosed funding in Sept 2015.

Urban Leash: offers on demand dog walking and cat-sitting services from anywhere at anytime, who a secured a $99,500 seed round in Nov 2014.

AllPaws is OkCupid for Finding Pets to Adopt, Swiping left and right and sifting through profiles is a regular practice for people looking for love nowadays.

Through the website and app AllPaws, the same approach is being used for those looking for a four-legged soulmate. AllPaws raised $1 million in capital in April 2013.

Will the Pet Startups above disrupt the pet industry as we know it?
Only time will tell, if they’re barking up the right tree.

If you have a question about your Startup business idea or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

SEC Oks Equity Crowdfunding with Regulation A+ Changes to the JOBS Act

SEC Oks Equity Crowdfunding with Regulation A+ Changes to the JOBS Act

On March 25, 2015 the SEC amended Regulation A, commonly referred to as Reg. A+, to further implement Title IV of the JOBS Act.

The amended regulation seeks to create an environment where emerging enterprises can efficiently raise public capital through crowdfunding.

Historically, Reg A has not been widely used for two reasons:
1) the $5M offering size limit was perceived as too low

2) the blue ski registration and qualification requirements were too onerous.

To address these concerns, Reg A+ increases the offering size limit to $50M in a Tier 2 offering and up to $20M in a Tier 1 offering.

Additionally, certain Reg A+ companies will be able to avoid the SECs blue sky reporting regime.

Reg A+ are public offerings, similar to an IPO, however the regulatory obstacles are far lower thereby making this type of investment much more accessible to all investors, accredited or otherwise.

This is particularly welcoming to small and medium sized businesses that struggle to raise capital from high net worth investors or institutions. These small and medium businesses can now raise capital from a much larger pool of investors (commonly referred to as the crowd) which will increase capital formation thereby growing jobs and the economy as a whole.

There are still many nuances associated with Reg A+ but overall the SEC’s amendment is widely seen as a step in the right direction. Some of the differences between Tier 1 and Tier 2 regulations are outlined the chart below:
Equity Crowdfunding From The Startup Garage

If you have a question about your Startup business idea or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Building Online Brand Presence as a Startup

How to Build Your Online Brand From The Startup Garage

Building Online Brand Presence as a Startup

Launching a new high growth startup is a way to build a business from the ground up.

Whether you are providing content, products or even services to potential customers.

Knowing how to build an online brand presence when getting a startup up and running is essential.

Especially when working in competitive fields and making a professional name and reputation for your brand.

Build a Creative Team

One of the most important factors to keep in mind when building an online presence for a startup company is the ability to cultivate a creative team to work with each day. Having a creative group of individuals who are dedicated to the vision you have for your startup helps with streamlining plans and moving forward in the right direction in any industry or field.

Get Engaged With Social Media

In order to ensure customer retention putting social media and social media marketing to use effectively is essential. Not only is it important to share updates on various platforms but it is also vital to communicate and get engaged with users who are also potential customers. Ask questions, request input and be sure to speak directly to those who want to know more about your startup to build a proper reputation while getting noticed in the industry you represent.

Use the Power of Influence

Using the power of influence both online and off is another way to spread the word regarding your startup business. When you have team members who engage with their online fans and followers it is much easier to share news, information and even product releases with hundreds and thousands of users simultaneously. Utilizing the power of influence is also a way to establish a professional reputation, helping others to gain trust in your business and brand, boosting sales and increasing generated revenue and profit.

Host Contests and Giveaways

One way to help build an online brand presence for a startup you are launching is to do so by hosting contests and giveaways. Giving away free branded merchandise and relevant gifts gives you the ability to spread your company’s name to promote loyalty and to keep customers coming back for more.

Using social media to host contests and giveaways is another way to build momentum for your brand with the use of sharing and spreading the word with other family members and friends of the current fans, followers and customer base you have. Giveaways and contests also showcase your dedication to delivering high-quality products and services to those who want to know more about your brand and business model, ultimately generating sales and additional income.

Consider Fundraisers and Crowdfunding

Getting a startup company off and running with success requires a bit of capital, which is not always easy to obtain based on your history as an entrepreneur and any experience you have in the field you represent.

Consider the option of launching an online fundraiser or working to create a crowdfunding campaign to spread the idea of your startup while gaining loyal fans and supporters of your business and its plan altogether.

Crowdfunding could be an option if you are not familiar with taking out business loans or seeking additional assistance from venture capitalists. Using a crowdfunding campaign is often free of charge and provides you with total control of the amount you need to raise and what the money invested is likely to be used for in order to continuously build the products you want to sell and share with the world. It also acts as a source for social validation. If consumers are unwilling to buy into your big idea then it may be a sign to rethink your business plan.

Get Creative with Press Releases

Any time you have a startup you want to promote gathering the interest of the media and press is stressful and at times, nearly impossible. Crafting creative press releases gives you the ability to appeal to local news, international news stations and even online blogs and communities who follow startups and products that are relevant to your own.

Understanding all aspects of building a brand presence for a startup is a way for you to get more out of the potential exposure required to continue experiencing success. With the use of the right tools, marketing and communication it has never been easier to garnish interest while attracting potential customers who are genuinely interested in what you have to offer.

Guest Blogger
Cameron Johnson is a business consultant and entrepreneur.
Over the course of his career he has conducted case studies on both social media optimization and non-profit marketing. Cameron has also had the opportunity to speak at international business conferences and was recently recognized as one of the world’s top 100 advertising experts to follow on social media.

The Startup Garage’s Top 10 Best Blogs of 2014

The Startup Garage’s Top 10 Best Blogs of 2014

2014 was a momentous year for entrepreneurs and startup companies around the globe. Through out the year The Startup Garage has shared our knowledge, resources, and insights with you in efforts to skyrocket your success.

Below our Top 10 Best Blogs of 2014, we hope you find them invaluable and worth referencing time and time again.

How To Evaluate Your Startups Business Model

The business model is the means by which your company makes money for the value that you deliver to your customers. Learn how to create a strategy to monetize your product or service. Find out more here: How To Evaluate your Startup Business Model

What Type of Funding is Best for My Company?

There are three main sources of funding, family, friends, and founders.
Learn to how determine which funding source is right for you.
Find out more here: What Type of Funding Is Best For My Company

How To Raise Startup Capital In 120 Seconds

A quick pitch should serve as a teaser of what’s exciting and noteworthy to come next. The intention of a 2-minute pitch is to deliver a heavy dose of substance, content, and sizzle regarding your Startup’s investment potential.
Find out more here: How To Raise Startup Capital in 120 Seconds

Infographic What’s Your Entrepreneurial Vision?

Behind every entrepreneur or startup founder there is vision, mission, and purpose on how to serve the world at large.
What’s your vision?
To Make the World More…
Beautiful? Smart? Fun?
Find out here: Infographic What’s Your Entrepreneurial Vision

How To Determine Market Traction For Your Startup

Market traction is proof that somebody wants your product; it communicated momentum in market adoption. The more market traction you can demonstrate the less risk there is in the investment.
Find out more here: How To Determine Market Traction For Your Startup

Social Media A Startup Must-Have

5 Reasons why Social Media is no longer optional for your Startup Business. Find out more here: Social Media A Startup Must-Have

How To Define a Small Business Vs. A High-Growth Startup

A startup company, also referred to as a high-growth startup, is a company with a business model that is designed to be repeatable and scalable. This is directly opposed to a small business,
Find out more here: How to Define a Small Business Vs. A High-Growth

How To Write a Term Sheet For Your Startup

Technically speaking, a term sheet is a non-binding agreement that demonstrates a basic set of terms and conditions under which an investment is made, typically by either an angel or venture capital investor.
Find out more here: How To Write a Term Sheet For Your Startup

How Long Does It Take to Raise Capital?

The average time is somewhere between three to six months for both you Angel round and your Series A round. It really breaks down into three major steps.
Find out more here: How Long Does It Take to Raise Capital

Why A Business Plan Is Essential When Crowdfunding Your Startup

Letting the crowd fund your startup doesn’t mean allowing your business plan to go unwritten. In the business world, approximately 543,000 new businesses get started each month and funding those businesses comes from a variety of sources. Find more here: Why a Business Plan is Essential When Crowdfunding Your Startup

If you have a question about your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Avoidable Legal Dilemmas Every Entrepreneur Should Know

Avoidable Legal Dilemmas Every Entrepreneur Should Know

Although the verdict is still out whether or not entrepreneurship can be taught there are a few legal problems that all entrepreneurs can avoid with some proper foresight.

8 Startup Situations Every Entrepreneur Wants to Consider

1) Founder’s Agreement: Most co-founders will have some simple planning conversations at the beginning of the venture. However, it is important to take these conversations one step further by developing a Founder’s Agreement. The agreement should outline what each partner brings to the business, his/her roles, and how the business and its assets is distributed when the agreement is terminated. It should also demonstrate how and when the business will be terminated as well as methods for resolving disagreements among the founders. A Founder’s Agreement formalizes the initial planning conversations to ensure that there isn’t any confusion down the road when one party remembers the conversations differently than the other.

2) Non-Compete: It is important that you check your contract with your current employer for any non-compete clauses prior to transitioning full time in your startup, especially if your startup is in the same industry. Similarly, be sure to place a non-compete clause in your employees contracts to ensure that they cannot steal your trade secrets and become your competition.

3) Incorporation: Be sure to incorporate prior to raising capital as it will reduce the amount of tax that you pay when issuing yourself shares. If you delay incorporation until after you’ve raised a seed round your business will very likely have a much higher valuation and thereby holding you accountable for the increased value of those shares.

4) Social Media: Social media can be a business’ best friend or worst enemy. Remember that all posts on social media are public and permanent, so be careful what you post. Create a company social media policy to help ensure the proper use of social media among your personnel. Always handle online criticism with positivity, transparency, and professionalism.


5) Crowdfunding: Crowdfunding is becoming a rapidly growing method for raising capital. As a result, there are a lot of schemes that the government is trying to crack down on. Don’t put yourself at risk by overpromising and under delivering. Be sure to deliver on exactly what you promise. Also, be sure to read the terms and conditions for each site that you start a campaign on as they might be different from site to site.

6) Website: If you sell products on your website there are a few very simple compliance issues that you need to be aware of. For example, you are required to list your terms of service, terms of use, terms and conditions, and privacy policy on the bottom of the page. Don’t catch yourself in a legal quandary because you didn’t take the time or money to consult with a lawyer upfront.


7) Provisional Patent: Don’t wait until you start selling your product to protect your intellectual property. File for a provisional patent (or better yet, a utility patent) and protect yourself from day 1. Be cautions when speaking about your product to anyone outside of the company and do not share any trade secrets. Use non-disclosure agreements when appropriate, but realize that many parties, such as investors, will not sign them. Lastly, it is important to realize that, in most cases, you can discuss your startup/product/service without giving away anything that is truly proprietary.

8) Unpaid Interns: State and federal guidelines dictate whether an intern should be paid. Should they determine that you hired an unpaid intern that should be paid you could be liable t pay back pay, back taxes, and penalties. Be sure to learn your local laws and abide by them.

If you have a question about your Startup Funding or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Why A Business Plan Is Essential When Crowdfunding Your Startup

Business Plans and Crowdfunding

Why A Business Plan Is Essential When Crowdfunding Your Startup

Letting the crowd fund your startup doesn’t mean allowing your business plan to go unwritten.

In the business world, approximately 543,000 new businesses get started each month and funding those businesses comes from a variety of sources.

Most recently, startups are beginning to utilize crowdfunding sites to promote their ventures and raise the capital they need through online platforms.

Similar to the popular TV show Shark Tank, startups have the opportunity to present their business to a number of “backers” who can potentially finance their business. Such crowdfunding websites are making it easier for new business owners to spread the word of their company and search for possible investors.

On the flipside websites like Kickstarter, Indiegogo, and Fundable are allowing for investors to check out a multitude of emerging businesses for possible fruitful endeavors, which leads us to….


5 Reasons Why A Business Plan Is Essential When Crowdfunding Your Startup

1) A business plan will be used as a blueprint for your crowdfunding campaign.

It will help define the purpose of your business/project, how it will operate, specify the exact amount of capital needed, and it how it will reward/benefit those that invest. These details are the key ingredients necessary for a successfully funded campaign.

2) A business plan is a SYSTEM (S)aves (Y)ou (S)tress
(T)ime (E)nergy and (M)oney when building and launching your business, both on and offline. Going through the process ahead of time, can prevent and even correct mistakes that might have otherwise gone overlooked.

3) A business plan is one of the most compelling marketing tools available to enroll others in your mission. After all, a crowdfunding campaign is only as successful as it’s amount of supporters.

4) A business plan will be used as an internal tool for you business as well, guiding your company through the first 3-5 years. Following this document with in your business will provide structure and stability, even during the most uncertain of times.

5) Eventually crowdfunding capital runs dry, and you need to look for your next funding source. Most likely that would be an angel investor, an individual who typically invest between $25,000- $100,000 of their own money. Angel investors want to see facts and figures. They want a well thought out business plan, one that demonstrates you have taken the time to do research, plan and organize your startup business. Exemplifying less risk and more return on investment.

2015 will be a revolutionary year for crowdfunding; with current trends stating an average of 325 new crowdfunding campaigns launching everyday.

This means investment opportunities and competition for funding are expanding at a rapid pace. Are you ready to #GetFunded?

Don’t let your business plan remain unwritten.

If you have a question about your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Social Media A Startup Must-Have

5 Reasons Why Social Media Is Key For Startups from The Startup Garage

Social Media A Startup Must-Have

5 Reasons Why Social Media Is No Longer Optional For Your Startup Business

Reason #1) Have you heard of a Website?

Does your Startup business have a one?
Chances are unless you’re stuck in 1994, it’s fair to say any successful business on and offline has a website.
Social Media Platforms are the WWW.’s for a new generation.
A generation of people, who know the power of the World Wide Web, and value instant connectivity both locally and globally.

Reason #2) “Your network is your net worth”

Well, what if your network was endless? We’re talking Billions of people Network/Networking just fingertips away.
Individuals exchanging key Resources, Connections, and Knowledge.
Investors, Advisors, Customers, Partnerships and even your Competition… all-waiting for someone to strike up a conversation.

Reason #3) Brand Equity

Behind any successful Startup there is a well-cultivated brand.
Wikipedia said it best, “Brands are one of the most valuable assets a company has.” The consumer’s perception of a brand increases both financial and market appeal. Social media provides the ultimate stage for a Startups brand personality to develop. As well as a massive instant audience ready to grow, evolve and help mold the business.

Reason #4) Startups = Innovation

As a Startup company it’s essentially your social responsibility to stay on top of technology and cutting edge trends. You are The Early Adapter, The Visionary, and The Magician, who predicts and creates the future for the rest of us. Social Media tops the technology and trend lists, providing a turnkey foundation to build Startup empires.

Reason #5) “Like” it or Hate it, Facebook, Instagram, Google+, Twitter, LinkedIn and others are our present and future.

The names and features might change, but their presence and influence in our lives are unavoidable.
 

Have questions? Feedback? Intrigued?
Tweet us @Startup_Garage We’re happy to help.
 

Whether you have a question about your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

The Past, Present and Future of Capital Funding

Past Present And Future of Capital Raising from The Startup Garage

The Past, Present and Future of Capital Funding

The Past, Present and Future of Capital Funding

The Internet and the integration of valuable software into corporate systems, has disrupted almost every industry there is, laying bare vast quantities of knowledge, which in the past was extremely well hidden and only known to a privileged few.  Just 10 to 15 years ago, you had to be lucky to find the right “know how” and get the right connections. In fact, breaking into certain industries could often take a whole generation or more. Now, those days are gone.

This phenomenon of “open knowledge” we live in today opens up all kinds of opportunities for entrepreneurs and for investors as well.

 

This knowledge is laid bare through information, blogs and media all available over the Internet; information that was not available in any way shape or form some ten years ago.

As a modern entrepreneur, all you have to do to find out what a venture capitalist is looking for is go to a VCs blog.
Some of the most respected VCs now share their insights, the process,  the things they look for in a startup and even information they require in a specialized business guideline.

When Did It All Start?

We can say that venture capitalists like Naval Ravikant, Fred Wilson and Brad Feld were pioneers. They began to open up and tell us what they wanted to see through their blogs back in 2002 and 2003.  Later we saw companies like Venture Hacks and The Funded pop up. These sites even allowed people to begin rating VCs – a feature that disgruntled many an investor.

Their Contribution

Thanks to these blogging pioneers, we now have explicit and clear information on what a venture capitalist looks for, what a term sheet is and how to reach them. These were once hidden clues that only the very clever entrepreneurs could find.

The Next Step

Alongside this initial contribution we’ve also witnessed an incredible advance in technology, which significantly reduces the cost of launching a new company. This means many new startups don’t need those large VC funds to get started. This opened the doors to SuperAngels or MicroVC.  This is an investor that has a collaborative mindset, one that doesn’t have a large board of directors, and one who offers easy terms. In turn this opened up a new trend for investors, that of open discussions, personalities and easier terms.

Now Comes the VC Service Provider

VC firms are now so open that many have changed the way they do business completely, making the VC a service provider.  The software they use to streamline their startup networks and companies has gone a long way towards making this possible.

Government Help

The federal government has also put its two cents in with The Jobs Act and Crowdfunding

This gives entrepreneurs online options for raising the money they need.

The Future

Many angel investors and entrepreneurs feel we are on the brink of new change. They believe the average business bank loan may quickly go out of style, and instead people will fund other people; mentor them and network them with others.

In exchange investors will share in their success. If they can’t pay you back, then no consequences, but if the entrepreneur is successful then so is the investor. The key to doing this effectively will be through the use of algorithms which identify the best people to fund.

Crowdfunding Best Practices

Crowdfunding Best Practices from The Startup Garage

Crowdfunding Best Practices

The execution of a crowdfunding campaign is challenging and time-consuming, but can be worth the effort. About 43% of Kickstarter campaigns meet their funding goals, and Indiegogo has a 20% campaign success rate. Whether you are going to launch a donation-based or equity-based crowdfunding initiative, here are some pointers on how to create an outstanding campaign:

The Video

One of the most important features of a crowdfunding campaign is the video. A good video will connect emotionally with the target audience, explain the goal, illustrate the benefits to the investor, and have a call to action. Chances are that an investor may only watch this video and not read any copy about the project,so it must be persuasive enough on its own to pique interest in your project.

Campaign Time Frame

Platforms like Kickstarter allow people to set a time frame from 1 to 60 days for projects to be funded. When choosing a funding duration it is important to consider the business goals and fan base. Businesses with a dedicated following and high awareness should choose a short funding duration to hit the target, so that they can push the campaign and keep up momentum. Yet if a business wants to create more awareness, build understanding of its brand and develop a fan base, then a longer funding duration is appropriate. No matter the duration of the campaign, it is key to maintain a sense of urgency.

Incentives for Backers

In the donation-based crowdfunding model, businesses can choose donation price points and incentives for backers such as early releases and other rewards. Ideally a campaign will have six well-spaced tiers in which to donate, starting at $1. If you have a physical product then it should be featured as a reward, but with software, for example, early access should be granted. Exclusive personalized rewards should be given out at the highest tier. In an equity-based crowdfunding model, where individuals can financially invest in the business, annual dividends should be distributed.

The Fact Section

You want your investors to have a good sense of your business, but often times, less is more. Do not overwhelm potential funders with too much information about your business. Rather, if you get repeat questions throughout the campaign you can go back and add to the frequently asked questions section later.

Social Media

Social media is a crowdfunder’s best friend. In the planning stages, identify your target audience, learn how to best reach them, and create a plan to engage them before, during and after the campaign. Update Facebook, Instagram, Twitter, and Tumblr with pictures and short snippets about your campaign. Use your friends, family and their extended networks. Do not hesitate to ask people for a retweet.

The Media

Drive traffic to your campaign by harnessing the power of the media. Submit your awesome campaign story to places where your target audience lingers. For example, gaining press from sites like Mashable or Tech Crunch would be perfect for new technologies. Reach out to television stations and newspapers to win stories that will promote your brand.

Be Open to Feedback

If the campaign is not going as planned, reach out to supporters and ask them for feedback. Take constructive criticism into consideration, make changes as necessary, and thank your backers for the suggestions.

Crowdfunding is challenging, but when a promising business conveys how it will fill a need in the market and will benefit the investor, it has a higher chance of being backed. Plan ahead, remember to breathe, work hard, and have fun!

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Would you like to speak with someone about the best funding strategies for your startup? Call us at (858) 876-4597 — or fill out the form and we’ll be in contact soon.