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What to Know Before Equity Crowdfunding

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What to Know Before Equity Crowdfunding

By Startup Valley (520 words)
Posted in Equity Crowdfunding on May 14, 2014

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The overwhelming popularity of crowdfunding sites like Kickstarter has demonstrated how eager American startup companies are to access new capital raising possibilities. While most of the well-known crowdfunding sites are based around incentives and rewards, StartupValley is based around equity crowdfunding.

Made possible by the Jumpstart Our Business Startups Act, equity crowdfunding puts the possibility of investment into private companies in the hands of the average person. StartupValley is uniquely positioned to take advantage of the JOBS Act once the regulations are finalized by the SEC. Your startup company could be well-positioned to reap the benefits, but before you jump in, here are three things you should know.

#1 – Equity crowdfunding is the future

It’s not always easy to predict the future of the investment landscape, but it is hard to miss the writing on the wall this time. Before the JOBS Act, there were less than 300,000 accredited investors able to provide capital for hungry startups. Once the SEC puts the final touches on what President Obama signed on April 5th, 2012, that pool will open to everyonethe age of 18 and over. When a market grows from 300,000 to more than 200 million, big things are certain to follow.

#2 – The power is in your pitch

Though sites like StartupValley can provide entrepreneurs with the tools they need to reach investors, it is up to you to draw them in with a proposition that is suitable for investment. The best pitches reach investors on a personal level. Remember, you’re not just pitching to professional financiers sitting in an uptown Chicago skyscraper. You’re pitching to the guy who just graduated from business school. You’re pitching to the woman who is trying to find an opportunity to turn her life around after a messy divorce. The more you can humanize your company, the better your chances of success.

#3 – You must bring investors to you

“This little light of mine, I’m gonna let it shine,” the old song goes, and it is the perfect mantra for equity crowdfunding success. What would you have to do to reach the eyes and ears of more than 200,000,000 people? Simply putting your pitch up on StartupValley is a great first step, but you must promote your presentation if you want to attract investors. Our previous story on gaining publicity is a good place to start.

If you’re still on the fence about selling equity in your business in exchange for capital, remember that equity crowdfunding provides benefits far beyond the money. Yes, it’s an efficient way to fund your startup, but it is also an invaluable way to get in touch with many experienced, knowledgeable professionals who may know some ideas that can make your company succeed. Your business can be a wild success if you know the right people, learn the right lessons, and follow the right path. Enlisting the help of a crowdfunding platform like StartupValley can be the first step in building a successful business..

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