Clients – especially commercial real estate developers who haven’t done a securities offering in the past – always seem to ask, how do I know if crowdfunding will work for my business. This is a great question and yet the answer is self-evident.
The Force is With You
The most popular product being sold is money. Almost everyone has some of it. Almost everyone would like to have more of it. And almost everyone would like to hear about how they can obtain still more of it. If you are developing a commercial income-producing property or launching or growing a business endeavor, chances are almost 100% that the market for your product or service is a tiny fraction of the addressable market of people who would be potentially induced to invest in a money-making investment opportunity that is properly documented, disclosed and marketed.
In the end, every entrepreneur, business and developer has to always make two sales – first, the sale of the money (and that’s to a really big potential pool of buyers) and then to the much smaller audience of customers who provide the sales that power their future business. If you don’t believe you can sell your idea to a larger audience, then you don’t have a sustainable business proposition and cannot be successful (i.e.: a bigger market opportunity exists for selling your potential investment versus the small potential market exists for selling your future products or services, so which is an easier sale?). So ends economics lesson 101. Once you know, you know, and then the odds may ever be in your favor.