Equity Crowdfunding Right for Your Business?

One of the common issues that small businesses encounter is the challenge of finding the funds to invest and grow. This is particularly problematic for an entrepreneur or a startup business, that may not be as well-known or may not have built a strong reputation. An equity crowdfunding solution may be the ideal match for your startup company. Available to entrepreneurs through Title III of the JOBS Act, equity crowdfunding allows most smaller companies to raise the necessary capital to fund projects or services that will help launch their business.

Company Considerations for Small Business

There are a few specific exceptions for companies in Reg CF (Title III) crowdfunding. In general, the following companies are not eligible to participate in Title III crowdfunding: foreign companies, companies that are already reporting under the Securities Exchange Act, companies that are investment funds, or those that are funding to complete a merger or acquisition.

Second, a startup business and entrepreneur must have a well-written business plan, a successful pitch and proposal to attract investors, as well as a product or service that captures the targeted audience’s attention. The business will also have to be active in its crowdfunding campaign through its designated crowdfunding portal. This typically involves a strategic marketing campaign and the ability to gather media attention about investing in the startup company. It may take months of attention and time to develop a plan and start the funding campaign.

A strategically managed crowdfunding campaign can be quite successful. Working with a crowdfunding solution to assist in the development and implementation of the campaign is a worthwhile investment, particularly for those that are new to crowdfunding strategies.

For assistance with your equity crowdfunding plans, contact Colonial Stock Transfer at 801-355-5740. As a professional transfer agent with nearly 30 years of experience, we can help with any of your transfer agent needs.

Eric Mellmer
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