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Lessons in Crowd-finance


Equities.com launched a crowd funding for equity campaign on Crowdfunder.com about three weeks ago. We did a video, developed the Private Placement Memorandum (PPM), subscription agreement, and other information. We also have forms for "how to invest" and other materials to support our campaign. You also have to get a third party to verify that your accredited investors are accredited. This is important and you must do this. You can't take foreign investors in your deal either under the new rules.

Although, there are hurdles, the response has been great. In three weeks we completed 25% of the raise. We were added to the CNBC Crowdfinance 50, and we've received some good kudos from finance legends. We're raising $2M and most of it has come from investors that are angels and seeking new opportunities to become part of a growth-stage company. We're different than most crowd funded companies, we are not a "seed" deal. We also create value through acquisitions and building our company using a "buy and build" model.

So here's what I've learned so far.

1. BUILD A GOOD VIDEO THAT'S INFORMATIVE AND ENTERTAINING. We spent some money and did a pretty good video. Two minutes seems to be the sweet spot.

2. GET GOOD TESTIMONIALS FROM PEOPLE WHO ARE INFLUENCERS IN YOUR INDUSTRY (ALSO CELEBRITIES HELP). Gene Simmons to Ken Fisher. Rock Star and Billionaire Small Cap Investor. Both very powerful!

3. MAKE CALLS, EMAILS, ETC... YOU HAVE TO FOLLOW UP. No one is going to help you close their investment. Its not like crowdfunding. There are subscription agreements, PPMs, and other legal documents that have to be executed.


5. SHOW TRACTION. GET THINGS DONE WITH OR WITHOUT YOUR FUNDING. MOVE THE BALL FORWARD. This is critical. Don't stop innovating, growing and succeeding. Do things on the cheap if you don't have the cash.

6. TELL EVERYONE. SOCIAL MEDIA IS THE KEY. Be a blatant promoter of your company. It can be tough, but we've all had to learn how to do it.

On Equities.com, we've had over 9000 views of our campaign. We're looking forward to finishing this round as we continue our growth. We've completed $521,000 in reservations of our $2M.

We recently signed with an investment bank called Offerboard to help finish the raise and prepare us for our next capital formation process.

If you're considering a crowd finance campaign, there are many things to consider. Make sure you have good advisors and help from everyone you know.

Best of Luck!

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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