In the past few months, there’s been a big shift in the equity crowdfunding world. Platforms, and the companies looking to raise on them, woke up to the fact that crowdfunding requires… a crowd. 

They’re realized that crowdfunding isn’t an easy button. It takes work. Not every company will succeed. And those that don’t waste a lot of money - their own and the platforms'. 

So there’s been a pivot to companies that have a built-in community, because those are the companies best suited to fundraising.

If your customers already love you, getting them to invest is a much easier sell than finding a random investor, teaching them about your company, and then convincing them to invest. 

What does this mean for startups?

• If you’re considering doing a crowdfunding raise, look at your community. If you have one, you may be a good fit. If you don’t, you could still succeed, but maybe you should focus on community (aka customer) building first. 

• If you have a crowdfunding raise, engage your community early! Explain to them that you’re raising capital through equity crowdfunding, what that is, and why you’re doing it. 

• Give them insights into the company. Equity Crowdfunding requires an (often uncomfortable) transparency, but being transparent with customers can actually be awesome. They’ll love you more, they’ll support you more, and, hopefully, they’ll invest!

• Get them ready for launch day. The goal of a great equity crowdfunding campaign is to launch with as much money ready to invest when you hit go as possible. $50k minimum, $500k is even better.

You know your community better than anyone else. You know what they like, and what they don’t. They may love your company, but they may not know you yet. Introduce yourself, start getting a little personal.  The more on the inside they feel, the more likely they are to invest. 

This process can be hard for a lot of founders for many reasons. 

It takes a lot of work!

It requires a lot of customer engagement!

It requires that transparency.

But when you’re raising capital, you’re raising capital. Besides keeping the business running, few things, if any, are as important. 

So as my friend Saana, a bus driver in NYC says, “you gotta do what it do!”

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