Raising Equity Capital is Your Business Now…
The Crowdfunding Value Proposition
Business equity crowdfunding (i.e. capital raises of greater than $2.5 million) used to be the playpen of broker-dealers, institutional funds, venture capital funds and angel investors.
You took what they offered or you went without.
The new regulatory construct provides an orderly market opportunity for directly accessing the investing-public on a broad scale, with accompanying economies and opportunities that provide the risk controls potential that all entrepreneurs crave.
Business Equity Crowdfunding Key Elements
Understand the Risks
Business requires us to accept the premise of taking risks to gain monetary reward opportunities. Understanding the odds of success probabilities – in the context of the alternatives – is critical decision-making everyone must grasp.
Understand the Costs
There is no free lunch. Crowdfunding materially significant equity capital to create significant financial investment leverage requires an investment in the form of issuance costs. Know which costs need to be paid before closing before you start.
Understand the Limitations
While the new market construct is designed to provide unbridled capital financing access, there are both limitations as to what you can do, and requirements owing to what the regulators must be given. You must be aware of them all.
Time is Money for Business Equity Capital Crowdfunding Offerings
How long should it take to raise your equity capital? The real answer is always and in all ways – it takes what it takes, like anything else. Having said, the regulatory construct provides important clues as to the expected minimum, median and maximum offering period expectations you should have under expected conditions.
Time is a function of money and vice versa. All other things being equal, the more money and resources you commit to raising your capital financing, the less time it is likely to require to do so. The trick is understanding what the potential commitment of time and money may be to optimize success.