Tag: What is Equity Crowdfunding?

5 Tips to get the Best out of Equity Crowdfunding

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Equity crowdfunding is one the most popular and rewarding types of crowdfunding. In equity crowdfunding, people invest in an idea. The investment money is used as capital. And it turns the idea into a business. Since it is really profiting, it has gained quite a lot of popularity. But even if you get into it, how to get through it? How to make the best use of it? In a way that is profitable. In this article, you shall find answers to all these questions.

#Let your company reach the right level!

It is a misconception that equity crowdfunding is for the companies who have just started. But that is not the fact. It is beneficial for the companies who are already profitable or revenue generating. Making people invest in your company even before starting it? That can be a difficult one to achieve. Make sure your company has reached a point where it is trustworthy. Then only enter the market for crowdfunding. This will increase the chances of a successful campaign.

#Genuineness is the Key! 

Remember, your investors and customers are the people you rely upon. You have to be genuine towards them. Misleading them will ultimately lead to your loss. When campaigning for equity crowdfunding, let your investors know about you. A structured and genuine plan, would attract more and more investors.

#Become eligible for tax relief

In UK, there are some special tax relief schemes meant for equity crowdfunding. Companies can avail tax relief of 30-75% of the investments made. But there are certain guideline regarding the eligibility. The company should have an assurance from HMRC. This assurance allows them to offer SEIS or EIS relief. It indicates that the company is eligible to do so w.r.t. the HMRC criteria.

#Work with the right platform

There are a lot of websites available today which can help you with equity crowdfunding. Different websites are made keeping different purposes in mind. They cater the need of different audiences. Before launching your campaign, you need to find out which is the right one for you. Some of them are meant for startups, some for small businesses. While some others provide options for both equity as well as reward based crowdfunding. Your choice of platform will have great impacts on your campaign. Be careful with your choice.

#Good network = Good equity crowdfunding

Building up a good social network can help you get the best out of equity crowdfunding. A good network would ensure your long-term success. This network would have your potential investors as well as potential customers. Begin with a blog or social media accounts. Stay active on them. Let people be familiar with you. This is to be done before you launch you campaign. Remember that!

Crowdfunding is an ocean. It has in it lots of goods and bads. Pluses and minuses. You have to filter them out. And for that, all you need is some good updated knowledge!

crowdfunding with equity

How crowdfunding with Equity works?

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Individuals looking for funds to launch their businesses or startups today, mostly opt for crowdfunding with equity.

People from various different industries are turning towards crowd funding to get funded. This has resulted in immense growth of the same.

Types of Crowdfunding 

Crowdfunding is further categorized into several types. The basic four types of crowdfunding include: equity-
crowdfunding, reward-based crowdfunding, debt-based crowdfunding and donation-based crowdfunding. Crowdfunding with equity is the most popular of all.

It is very different from the other types. Investors fund businesses In crowd funding with equity. They get some stake in the company in return. It is often subjected to several laws and regulations due to association with shares and stakes.

How crowdfunding with equity is different from others?

JOBS Act enacted in the year 2012, has created many opportunities for crowd funding with equity. Crowdfunding with equity basically involves investors who contribute to a business or startup. These businesses provide a share in their business in return for the investment made. Investors can greatly benefit from crowdfunding with equity. They can make small yet steady investments. Investors are also surely benefited as the startup grows.

#It is better than the old age methods

Startups now have a better alternative in the form of crowdfunding with equity. Rather than the traditional methods like taking a loan.

#It is fair to all

Initially, only wealthy people could invest in businesses. But many small investors have emerged with the advent of crowdfunding with equity. Even people with an average salary can now invest in a company and get its stakes.

#You can save some money on tax!

Crowd  funding with equity even gives some tax relaxation in some countries.

Some cautions to think about!

There are many risks involved in crowd funding with equity. It is really important to analyze them thoroughly.

#Stay cautious about the amount.

First of all, the amount to be invested should be wisely chosen. Only the amount which can be risked by an investor should be contributed in crowd funding with equity. Because it has an equal probability of success as well as failure.

#Planning is the key!

Creating an efficient plan before launching the campaign is a very important step. Since this step decides the success of a campaign in crowdfunding with equity.

#Right platform means right path

Choosing the right platform for the campaign is also very essential. This increases the visibility of the campaign.

#You need to set the audience

Fixing your target audience in advance  is extremely crucially. When crowdfunding with equity, you have to work in a specified manner. You have to do it by keeping in mind you target audience.

Though crowdfunding with equity involves certain risks, it can prove to be very beneficial if done properly.