Questions

Which crowdfunding platform should I use to raise funds for a small business?

I am creating a simple service company in Plumbing and Service market, local in Los Angeles, with ready business to be inherited by parent companies. I want to see if I can utilize a crowdfunding platform to raise funds for acquisition of a small, or multiple, operations. We have good return and yield, licenses and we can capitalize, but we would like to test this method for a larger upcoming project.

6answers

I am assume you're talking about equity crowdfunding. There are several sites available now for accredited investors, which would be looking for a higher return than you are probably expecting.

After May 16th this type of investing will become available to the general public. The SEC just opened up the window for new websites to register as "intermediaries" so you'll see a lot more coming on line between now and May. Given the description of your business idea, I'd suggest using one of these and trying to attract investors looking to invest in small businesses that are seeking acquisitions.

The SEC guidance is complex (about 685 pages). I would be happy to walk you through it and help you find a site that will work well for you.


Answered 4 years ago

In the event that you aren't talking about equity or royalty crowdfunding, but a regular site I would strongly urge you to stay away from IndieGoGo. They are great for charity and design but when it comes to business funding campaigns hardly come close to their goal let alone meet it.

If you decide to use a business crowdfunding site I would recommend you offer royalty based funding rather than equity since you will retain 100% of your company and will only pay royalties for a limited amount of time.

Hope this helps. I don't typically offer crowdfunding help but I am an expert in marketing and launching startups. Please feel free to setup a call if you have any other questions.


Answered 4 years ago

I would suggest Lendingclub.com. This is more crowd funded loan rather than an investment. If you can quickly generate cashflow you should be able to payback the loan at a low interest rate.

The advantages here are:

- You can get the loan within 1 week
- You don't have to give up any equity in your business
- Super low interest rates and easy payments.


Answered 4 years ago

I launched AutoPilotPR last year to do this one thing: manage successful rewards based crowdfunding campaigns. I have studied hundreds (successes and failures) and learned a few things in the process. I did the first campaign for myself in 2011 and forever fell in love! I have helped other people raise over $1.5MM and am happy to share the highlights. But first, allow me say that some good insight has been shared so far, I would also add that for rewards based crowdfunding we have found that kickstarter is the better choice for businesses (80/20 Rule). We look for reasons not to use kickstarter, but assume from the start it will make the most sense. See the restrictions on their site, or give me a call.


Answered 4 years ago

Kickstarter.

Ask, Ask, Ask, then Ask again.

Bonus:
Here is $10,000 worth of information for free and in a nutshell.

Concentrate on the 3 M's. There are actually 7, but 3 will do for now. These are Market, Message, and Media. They come in that order.

Who is your target market (customer, clients, buyers, users, etc.)?
Tailor your laser focused message for this target market.
What is the best media mix to get your message to that market?

Here's what you do...first, make it an offer that is so incredible that they cannot resist. Secondly, do all the work for them. Make it so easy to make the purchase now that they can do it virtually without effort. Thirdly, give them an incentive to act right now. Fourthly, offer an almost unbelievable guarantee. Fifth, offer a bonus for acting now. There are many other incredible steps, but these steps should help the novice to the professional sell anything.

Whether you are selling B2B or B2C, you have to focus on selling to only one person. You can actually sell to one person at a time while selling to millions at a time. They are one and the same. Don't get off track, what we call digital marketing selling is just selling in print. And that has not changed since Cluade Hopkins wrote "Scientific Advertising." Really long before he wrote the book.

The secret to success: I have had the pleasure of knowing and working with some of the biggest names in business, celebrities, actors, entrepreneurs, business people, and companies from startup to billion dollar operations. The number one reason for their success is doing what they know and love while doing it in new, creative, and innovative ways.

Ask, Ask, Ask. Have thick skin and learn from each "mistake." In a short while, the market will tell you what you need to do and who and what you need to ask. But get started now even if that just means asking a contact on LinkedIn.

While you are thinking, think big and think of something at least 1% better, newer, or different. And being cheaper is not a winning strategy.

Make decisions quickly and change decisions slowly..unless you are actually going off a cliff.

Remember these two 11 letter words...persistence and consistency. They are two of the most important tools ever invented.

Treat everybody you talk to and everybody you meet (including yourself) like each is your number one million dollar customer.

Best of luck,
Take massive action and never give up.
Michael

Michael Irvin, MBA, RN


Answered 4 years ago

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