The crowd will not only come in with money but with a vested interest in the entrepreneur’s success. Unlike investing in a share of Apple, a crowd investor can now have a direct impact on their investment by marketing the idea, driving people to stores, purchasing the product, etc.
So What Does This Mean For The Cash Hungry Entrepreneur?
With crowdfunding, not only will you have access to capital for your business, but also promotion and a built-in network of people to help you make it a success. Growing a business is no easy task; it takes a carefully constructed ecosystem, a tremendous team of supporters (1,000 fans) to help you realize your vision. So how can you get your network ready now to have your supporters in place?
- Build you social media networks—reconnect with people who know how good you are, like old bosses, co-workers, college buddies and others who may have an interest in investing.
- Network offline—attend chamber of commerce meetings and get to know people in the community who have strong networks.
- Join BNI groups—they are full of people willing to help spread your ideas.
- Apply for award nominations–and start building your bio to make you worthy of investor dollars.
- Apply to be a speaker at industry events—even small ones (meet-up groups are great for this).
- Join a professional association–and network with people in your industry.
Even though your marketing channels will be limited to social media, you must be careful not to “over share” information about your business. Because most content on platforms such as Facebook and Twitter is posted for free, these channels are already saturated with information. Like email, if messages are sent too frequently or are irrelevant to recipients altogether, your audience may begin to ignore you or even speak negatively about your business. It requires a little extra effort, but you should tailor your communications appropriately for each of your audiences and send then in moderation for optimal impact.
It is important to remember that crowdfunding is not meant to be free money; it is meant to solve a serious problem in the capital markets and give people access to technology to reduce the overall costs involved in raising capital.
Guest Author – Jason Best and Sherwood Neiss led the U.S. fight to legalize debt and equity based crowdfunding, co-authored Crowdfund for Dummies and founded Crowdfund Capital Advisors where they provide strategy and technology services those seeking to benefit from crowdfund investing.