ANYONE HAS ANY EXPERIENCE IN CROWDFUNDING?
Recently our team is planning to launch a crowdfunding, however, never try crowdfunding before, wondering if there's any advice?
Including the marketing strategy, our team actually is preparing for crowdfunding to reach the goal in the first day launch!
We've developed our facebook fanpage, Instagram and the Website, not sure if there's anything we can do to reach more crowds.
Any insight is welcome! Thanks
Crowdfunding requires a crowd, i.e., investors who care. You can do all the legal work, marketing etc..., but if you cannot find the crowd that wants to invest it won’t work. It’s pretty uncommon (though it does happen) that an unaffiliated crowd just appears to invest. Usually crowds are based on existing networks and extensions of those networks.
Over 90% of all fundraising in the U.S. is done using Rule 506.
This advice is from my perspective as having recently gone through this process. Always have a Securities lawyer confirm before going down any of these paths. It would be really helpful if you can provide some more insight into what you are raising money for as ^[redacted] mentioned.
Step 1. Determine if you want to raise money from accredited investors or open to anyone. We chose to go with accredited investors only at this point in time. Because of that we chose REG D. Reg CF and Reg A can raise money from both.
Step 2. Determine how much you need to raise. These numbers may be a little dated as there have been recent changes. Reg CF has a low per year number...I think it was just brought to $5 million from $1 million recently. Reg A Tier 1 and Tier 2 allow you to raise $20 and $50 million respectively per annum. And Reg D has no limit to my knowledge.
Step 3. Time and Money. Reg A is by far the most expensive, regulated and takes the most time. From what I understand Reg CF is the simplest and fastest to get started, but I didn't explore in detail as the per year number was way too low for my application.
Hope that helps get you started.
Besides doing the legal work on buying and selling companies, i am also a securities lawyer. Happy to discuss with anyone the various options for fund raising. Almost all fundraising for Searchfunders is done under Reg D, Rule 506 (whether you know it or not). Crowdfunding is broadly defined but usually means Reg CF. Regulation A is a lot more involved and likely not what someone starting out wants to do. It can get pretty complicated so feel free to contact me to set up a discussion.
https://www.jdsupra.com/legalnews/why-private-capital-and-crowdfunding[redacted]/