How Equity Crowdfunding Is Different From Traditional Fundraises

How Equity Crowdfunding Is Different From Traditional Fundraises

March 17, 2022 by investor

How Equity Crowdfunding Is Different From Traditional Fundraises

Equity crowdfunding is different from traditional fundraises.

Here is a list of differences to consider:

Traditional fundraises expose your company to accredited investors which is a much smaller group.

Equity crowdfunding exposes your company to the general public which brings greater branding and awareness.

This helps promote and sell your product or services.

This gives access to many more potential investors including customers, partners, and developers.

It helps build your community and network.

Equity crowdfunding also differs from traditional fundraises in that it exposes you to unsophisticated investors.

The general public investor is often not aware of the risks in early-stage funding and often have many questions about the startup.

It also exposes your financials, team, and other details of your business to a broad range of people.

In traditional crowdfunding, the founder spends their time pitching and closing investors.

In equity crowdfunding, the founder spends money to advertise on social media and seeks additional investor networks to tap.

Equity crowdfunding also comes with fees to meet the compliance requirements.

Traditional fundraises typically do not require platform fees.

Keep these differences in mind in running an equity crowdfunding campaign.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

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Disclaimer:
Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.

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