Should You Raise Equity Capital Through Crowdfunding?


For many businesses, equity capital through crowdfunding is soon going to be a reality. In some places, like the UK, it has already become a viable option. If you need money for your business, then it could be the right answer for you. There are 5 key benefits that a business or entrepreneur can receive through equity capital that comes from crowdfunding. Would these help you out at all today?

1. Tell More Investors Your Story In Less Time

The best advantage of using crowdfunding for your equity capital needs is that you can reach more investors with less effort. You can tell your story with sometimes just a single link. Even though it sounds a bit like a form letter, a great script will still personalize your story and make it something to which an investor can relate. You can also put in all of your documents into this concentric link so that your campaign distributes all of your mandated literature.

2. It’s Easier to Stay Compliant

Crowdfunding platforms that already allow equity capital to be raised must keep their listings compliant with local laws so they don’t get into trouble as a platform. This means the entire setup process is automatically geared toward making every business and entrepreneur stay within the boundaries of local regulations. It streamlines the process as well, which means eliminating the high fees of compliance lawyers and those lengthy, day-long meetings that sucked up your revenue.

3. There’s a Larger Base of Investors

With equity capital crowdfunding, it is possible for a business to reach people who want to invest, but in the past just couldn’t do it because of a lack of money or accreditation. Investors don’t necessarily have to be locally-based in order to invest today any more either. This creates a larger base of investors that are naturally inclined through their affinity to want to invest into the ideas or products that are being offered.

4. Transitions Become Much More Seamless

In the past, raising capital has been a difficult process at best because there would need to be emails sent to each investor individually, phone calls placed, forms attached, and extensive legal work. It was an expensive process. With equity capital crowdfunding, all of the needed materials are included within the confines of the campaign. All investors can receive a status update with an update to the campaign itself. Closing documents and processing becomes a concentric process as well and investors can even act as their own banker.

5. It Naturally Brings People Together

Forget the days of needing to create brand ambassadors to create awareness for an equity fundraising campaign. Forget the time an investor has needed to take to find the right opportunity within the correct niche industry. All a business needs to do is put the opportunity out there and then reach out to investors who want to get involved. Instead of needing to identify an investor, the investor gets to identify the entrepreneur.

Equity crowdfunding is the future. Are you ready to get on-board today?