Crowdfund Investing For Dummies
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The only reason to launch a crowdfund investing campaign is to raise money for your business. If you’re looking for publicity and aren’t serious about raising the money, don’t put your idea on a crowdfund investing platform. There are plenty of better ways to get publicity:

  • Create a group of videos and try and get them to go viral.

  • Launch a series of press releases.

  • Network your way into a few key news articles.

If you use a crowdfund investing campaign as a publicity stunt, you’ll anger a lot of people, including folks in your online social network. People will spend time reviewing your campaign, asking questions, and thinking about the decision to invest or not. Don’t waste their time by launching a halfhearted campaign for publicity purposes only.

Consider what happens if you get even a handful of people to support you with investment pledges. Say that someone in your network pledges $100 to your campaign within the first days after it goes live.

Within a few weeks, that person likely has figured out that you aren’t committed to the campaign and aren’t doing what’s necessary to raise the money. (Failing to answer potential investors’ questions in a timely and robust manner would be a clue, for example.)

Your investor gets disillusioned, and when the campaign period ends (in two or three months), he has a sour taste in his mouth for the whole crowdfund investing experience. Guess what? You just took that potential investor away from other people’s legitimate campaigns. He’ll be much less likely to take a chance on another startup or small business because of your lack of commitment.

On the flip side, if you’re serious about raising money, you should absolutely try to use your campaign to create publicity for yourself and your business. Doing so helps you for two key reasons:

  • Publicity helps your campaign go viral so you can raise more money.

  • Publicity gets your business idea in front of many more people, which is a great help when your product or service is ready for the market.

A lot of eyes will be focusing on your campaign when it goes live, and you need to try to leverage this situation as much as you can. Communicate as much as possible with your investors and potential investors.

Contact newspapers, blogs, and TV stations that have anything to do with your type of business. Write a story about what you’re doing, and send the story and a link to your campaign to these media outlets. (After all, it can’t hurt to do at least part of the work for them. Smaller media outlets sometimes run such a story with little modification, so make sure you’ve written something good!)

About This Article

This article is from the book:

About the book authors:

Sherwood Neiss, Jason W. Best, and Zak Cassady-Dorion are the founders of Startup Exemption (developers of the crowdfund investing framework used in the 2012 JOBS Act). They deeply understand the process, rules, disclosures, and risks of capital formation from both the entrepreneur's and the investor's points of view.

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