Below are five ways that equity crowdfunding can make managing your company easier:
Telling Stories to Investors Using Only One Link
Businesses may maintain a company investing profile, make engaging videos, use due diligence tools, or have access to founder profiles; prospective investors can digest all of this information in just a single page. Companies also can share financial projections and investor decks, which contain information that is critical to the process of funding your startup company.
Staying Compliant
The process of capital raising (also known as the offering process) and regulations that surround private startup offerings are often difficult to navigate. Many entrepreneurs own private companies rather than public; the omissions or mistakes that these entrepreneurs make go largely unnoticed because they were made in private transactions. As fundraising continuously becomes more transparent and public, it will become more important to have strategies that help entrepreneurs comply with regulations. Equity crowdfunding assists in managing those protections for both investors and startups by making capital raising more streamlined.
Reaching Investors Abroad
Startups that raise capital on equity crowdfunding websites may share their deals with an array of accredited investors worldwide without having to rely on time-consuming and expensive travel. This can directly facilitate the growth of your startup company, making your business more well-known which may increase its number of investors.
Seamless Transition from Founding to Closing
Recently, companies have begun using online systems which have made the entire capital raising process seamless ─ from information updating for investors to processing and disseminating funds and closing paperwork. Investors and entrepreneurs have much more control when raising capital with equity crowdfunding, and can now act as their own bankers with many more tools at their fingertips.
Evangelists, Customers, and Investors
In the past, entrepreneurs have needed to seek out angel investors, venture capitalists, marketers, and investors separately. Asking friends to support and evangelize a business was possible; however, it was, and still is, difficult to obtain adequate funding this way. It takes even more time to capture and identify potential customers.
However, with equity crowdfunding, it is much easier to find financial support for your business. Investors have become customers, evangelists, and supporters. With less pressure to acquire adequate finances, entrepreneurs can concentrate more on offering the best products and services possible.