Crowdfund Investing For Dummies
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The pitch video that the entrepreneur or small business owner creates is your window into his crowdfund investing business concept and plan. You can find this video by visiting the particular online funding platform that is hosting this person’s investment campaign. You should view funding pitch videos only on SEC-approved crowdfund investing sites.

That’s because the SEC wants to ensure that you have access not only to the video but also to the complete information about the company’s offering, which is available on the same website.

When you visit the website, at the invitation either of the business owner himself or of someone in your social network, you should easily be able to locate the pitch video from the campaign home page. Watching this video is your opportunity to hear this person’s passion and drive. It also gives you an idea how the business owner’s mind is organized.

If the pitch video is scattered or wishy-washy and doesn’t really say much of importance, chances are, the business itself is going to be disorganized and lack focus. After all, the entrepreneur or business owner should be well aware that the pitch video is his opportunity to sell everyone on the business. If he hasn’t put a lot of time and energy into organizing it, this dearth of effort should be a major red flag.

On the other hand, a pitch video that is well thought out should give you a good sense of who the entrepreneur is, what kind of team he has created, and what his business model looks like. It doesn’t have to be an Oscar-quality video to achieve these ends.

The content is what really matters, and that content should include how investors’ money is going to be used and why this entrepreneur is the right person for the job.

Pitch videos shouldn’t be longer than five minutes, so don’t expect a video to contain every bit of information you need to make an investment decision. Instead, consider it an advertisement that either piques your interest in the entrepreneur and the business or turns you off completely. The detailed pitch and financial information allow you to really dig into the business plan.

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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