Startup founders often ask me about using crowdfunding as a fundraising strategy to launch their startup. For many consumer products companies, this may be a good path to test product concepts. However, for those that want to raise equity, the misconception that crowdfunding is the easier path, vs the traditional path of finding friends and family, grants, and/or angel investors to get the company up and running, is simply not true.
Recently one of our local entrepreneurs, David Shaner, successfully raised over $ 2 million in equity from a crowdfunding campaign. He wrote a very detailed blog about how he did it, and what he learned along the way. He highlights several items that the novice entrepreneurs may not understand about successful equity crowdfunding. Things like the prep work you need to have in place for your marketing effort prior to launch. The need to have half (ideally more) of your raise already committed before your launch. And the fees associated with closing the deal. If you are an early-stage entrepreneur and looking to raise equity, this is a great primer on what a successful equity crowdfunding campaign really requires.
A bit more background on David and Offline. Offline Media is a 10-year-old-startup that has shown amazing grit to get from the initial concept launch through several pivots to find product market fit in 2 markets. This equity crowdfunding was not to find product market fit, but rather expand a proven successful model into other markets.
Thanks for a detailed explanation of your process and experience David.
If you are looking to scale your high-growth company by raising equity, check out CED’s Connect to Capital Program.