5 Insider Equity Crowdfunding Tips for Entrepreneurs

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5 Insider Equity Crowdfunding Tips for Entrepreneurs

Equity crowdfunding has taken the entrepreneurial world by storm — empowering creators to raise funds from the crowd in exchange for future equity in company profits. 

As with every startup task, building an equity crowdfunding campaign is a lot of work. But if you’re up for the challenge, it could lead to a wildly successful funding round that launches your business to scale. 

Here at CrowdCrux, we’ve worked on many equity crowdfunding campaigns, and we’re dedicated to “writing the book” on the formula for a successful launch. 

In this article, we’re giving you five insider tips that you can apply to your own campaign that are proven to lead to a successful funding round from the crowd.  

Let’s dive right in! 

Get People to ‘Vouch’ For You 

When it comes to running an equity crowdfunding campaign, social proof is extremely important. Investors interested in your business want to see that you’re a trusted name — and it’s your responsibility to prove it. 

While listing out personal accolades on your campaign page is important, mobilizing your core network of colleagues, friends, customers, and other relevant parties to publicly vouch for you is an extremely powerful tool. 

And the good news is, most equity crowdfunding platforms have this functionality built in. On WeFunder, for example, there is a ‘What People Say’ section where you can invite your network to vouch for you:

StartEngine has similar functionality in their ‘Comments’ feature, where people can leave blurbs about why they believe your project is a good investment:

We suggest that you get at least a dozen comments / vouches before your campaign goes live. You can invite people to vouch via a built-in email sequence provided by the platforms, or you can send more personalized emails with a link.

Either way, we suggest that you customize your messaging to communicate the importance of this process to your supporters. 

And remember: the more the merrier. Got a hundred people that can vouch for you? Encourage them all to take action. There is nothing more powerful than social proof in investments! 

Set Yourself Apart With Your Video 

Unlike on traditional crowdfunding platforms such as Kickstarter and Indiegogo, equity crowdfunding campaign videos aren’t quite as polished. 

But that doesn’t mean that you should slack off. 

Most six-to-seven figure campaigns on equity crowdfunding platforms have a highly engaging video that kicks off their pitch. And as the industry continues to develop, the video quality is sure to follow suit — just as it did with traditional crowdfunding. 

Here are some things your video should include: 

  • Engaging graphics, music, and b-roll footage 
  • Any exemplary financial statistics that prove a successful concept 
  • First-hand accounts from the founder 

The best way to structure a killer campaign video is to study successful campaigns in your niche and try to emulate their strategies. For many entrepreneurs, this will mean hiring a video expert or agency — which requires some up-front investment. 

But that initial investment in your video is worth it if it means attracting hundreds of investors to your campaign! 

Focus on the Highlight Section 

Your ‘Highlights’ section on Wefunder or ‘Reasons to Invest’ section on StartEngine are an opportunity for you to communicate high-level, compelling reasons to invest in your company. 

You’ll want to shoot for 5-9 bullet points, and include things such as: 

  • Growth statistics and future projections 
  • Past successes in building businesses 
  • Team expertise 
  • Market size 
  • Traction thus far 

Again — study what other campaigns in your niche are highlighting, then do your best to do the same. 

Keep in mind that on WeFunder, your first two highlights are especially important. These are what will show up when people are scrolling through campaigns on the website — so do your best to induce a click and allow them to explore further:

Get creative with your highlights, and feel free to use emojis, when appropriate. Remember — this is practically a sales page! There is no need to be boring. 

Create Desirable Rewards

With an equity crowdfunding campaign, equity will be the largest incentive to invest. 

However, you can do more to encourage people on the fence to invest, as well as promote larger investments. 

For example, let’s say your minimum investment is $500. Every investment matters — but really you want people to put in more than that. 

You could incentivise people to do so by offering an increased number of shares for a certain tier. At $5,000, they get 5% more shares. At $10,000, they get 10% more shares, and so on. 

You could also structure reward tiers around your product, as in the case of 20/20 Gene Systems on StartEngine. For each tier, they offered screenings for multi-cancer or lung tests. Check it out: 

You’ll have to consider carefully what types of rewards make the most sense for your business. Whatever you decide upon, we highly suggest that you build some sort of additional incentive into your campaign to further sweeten the deal for your prospective investors. 

Call Upon Experts in the Field 

As an entrepreneur, you’re really good at a lot of things — most notably building a business. But when it comes to executing an equity crowdfunding campaign, you are probably lacking some of the required expertise. 

Of course, a great way to combat this is through thorough research. But the best way to ensure that your campaign reaches its maximum potential is pairing up with an experienced team of experts who have worked on these campaigns in the past. 

This will require initial investment — but it can lead to huge pay-offs down the road. In our humble opinion, the best place to start is here at CrowdCrux — we have demonstrable success running these campaigns, and we’re ready to go to work for you. 

If you’re interested, you can book a coaching call with our founder Salvador Briggman. 

Don’t feel like you’re ready for that just yet? No problem. We have some great educational resources available to you: 

Good luck with your campaign! There couldn’t be a better time to launch an equity project — the industry is experiencing a significant boom. 

And remember, CrowdCrux is here to help if you need us!

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