How to make a successful equity crowdfunding compaign? – 5 main points
American business magazine the Entrepreneur has listed the critical factors for attracting investment through a crowdinvestment platforms. Simex, a digital assets exchange with crowdinvesting options, decided to check if these points are truly helpful for projects looking for investment.
1. A well-designed business model and clear action plan
To attract the investment it always requires a clear business plan and well-written supportive materials. There are thousands of investors looking for small- and medium-size projects to invest money, but what they want is an understanding of how their investments will be used.
Simex facilitates project owners with the diverse options to make the business proposal attractive. A quick and easy-to-use project placement engine offers allow attaching a project's presentation and financial documents. What is more, SIMEX helps to organize both online and offline negotiations with future investors.
In the section "Projects" investors can see project teams, financial needs, detailed business plans and read a legal investment agreement before making choice where to invest. It is important to provide the full information to be an attractive project for investment.
2. Effective communication strategy
It is crucial for a successful business based on crowdinvestment to stay in touch with investors and build an effective communication strategy. Transparency and reliability play a significant role when you deal with several investors at the same time.
SIMEX fintech platform allows project owners to publish news and communicate with investors online. If there is a need for a personal online or offline meeting, SIMEX consultants can help to organize one.
3. Find your investors
The Entrepreneur defines this point as "develop your crowd", which means that startup developers should first look for investors in their network and private environment.
SIMEX totally agree with this statement and believe that, unlike traditional financing sources such as banks and investment funds, equity crowdfunding allows businessmen to be more flexible. If the project owners find additional sources of investment he/she can repurchase investment shares or negotiate changes in the project to use crowd investors' assets for other purposes related to the project.
4. Meet the legal demands
It goes without saying, that businesses must comply with laws and existing security regulations. Nevertheless, crowdinvesting partnerships lack proper investment agreements which protect both investors and projects looking for money.
Investment contracts made through SIMEX are protected by law. Investment agreement puts certain obligations on businessmen and clarifies the actions of both parties in case of conflict. Clear rules make everything clear and more predictable, which increases the chance to find an investor.
5. Develop a process-driven company
The special thing about equity crowdfunding is that ordinary people can become investors. It means that the business strategy should be a process-driven: investors want to understand the businessman's next steps and access the information of how the project will use their money, preferably in simple words.
A multifunctional SIMEX platform plays the role of the bridge connecting investors and projects looking for money. Further information about our crowd investment options you can find here.