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WittySparks / Business / Why it Makes Sense to Raise Capital Through Equity Crowdfunding
Funding options to grow your business

Why it Makes Sense to Raise Capital Through Equity Crowdfunding

Business April 5, 2016 by Nishitha

Equity crowdfunding has become extremely popular for those starting up. Hailed as being instrumental in helping entrepreneurs raise capital for new investments, crowdfunding benefits are numerous. The following are five ways that crowdfunding can make your entrepreneurial investments so much easier.

On this page

  • Investor Story Telling
  • Remain Compliant
  • Reaching Investors Globally
  • Transition From Launch to Close
  • Investors, Marketers and Customers

Investor Story Telling

The rough stock market has made business owners rethink their sales tactics in regard to boosting sales. When you’re looking to use a single link to present a new capital raising idea, equity crowdfunding can prove lifesaving to investors. Here companies can find a way to design videos that are engaging, maintain their profile, gain access to other profiles, and find useful tools for other potential investors.

Similar information can then be used to share critical documents such as financial projections and term paperwork. Thankfully, there’s no more need for lengthy phone calls or emails when you need to share a simple story. Founders have found an outlet where they can hone their storytelling skills and share them digitally.

Remain Compliant

Regulations and guidelines surrounding capital raising can be murky and very challenging to navigate. It can also be hard for some to understand. Because there were often private transactions, entrepreneurial mistakes often went unnoticed. Aubrey Chernick is a successful entrepreneur who has built platforms to help other experienced and new investors and entrepreneurs through equity crowdfunding.

As the founder of Candle Corporation, Chernick is a well-known philanthropist who organizes a number of successful crowdfunding events throughout the year. As fundraising becomes more worldwide, it will help other entrepreneurs be able to follow the guidelines and regulations.

It can also offer suggestions on how they can stay within the set parameters for such adventures. Equity crowdfunding monitors the protections for investors and startups. They do this by making it easier to follow and streamline. It’s also done with a more cost-effective and affordable approach for investors.

Reaching Investors Globally

Before the JOBS Act, an entrepreneur was advised to refrain from talking about capital raising with strangers. Therefore, the investor and entrepreneurial relationship had limits both personally and geographically. Thanks to the Internet information is shared more frequently and new tools are being used to discuss equity crowdfunding.

This also allows investors to access opportunities that they may miss in the past. Startups looking to raise capital through equity crowdfunding sites have the ability to share the information with a wider investment audience. They can also save costs on travel since the Internet can go global.

Transition From Launch to Close

The capital raising process can be challenging and chaotic. There may also be a large number of incorrect forms, endless emails, and unnecessary attachments. This can make for some costly legal work.

Fortunately, online systems have been put in place to make the process easier. From dissemination and investor processing to closing documents, capital raises are now more streamlined. This brave new world allows entrepreneurs to act as the banker with all of the right tools at their fingertips.

Investors, Marketers and Customers

In the past, there was no easy way for entrepreneurs to chase down marketers and investors. Asking friends and acquaintances to support their endeavors and finding rich resources through family members was typically a separate transaction. Time was also wasted capturing the right target audience for an investment project.

With equity crowdfunding, the processes have unified and become one and the same. Investors have now become a marketer, investor, and rich uncle. With the introduction of powerful supporters, startups now have the option to focus on and deliver the best possible product or service to the consumer.

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About Nishitha

Co-founder of WittySparks
WittySparks Staff

I am done with my Physiotherapy Graduation. And I always try to share Health and technology tips with people. Apart from Physiotherapy and being a tech savvy, I do explore more on Technology side and I keep sharing my findings with wider audience.

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