Crowdfunding Readiness

Funding is no time to rely on a gut-feeling or hearsay, you must do the research AND the math.

Are you ready for this?

Not everyone using this workbook will decide to run an
Investment Crowdfunding campaign. 

You can probably guess the reasons. The most common issue we see: 

Founders / teams don’t do the homework to know if they are ready. 

Best part: it’s completely fixable. Use the Before section of the workbook to ask yourself/team the tough questions. Do the activities. Make notes and calculations. Think about your “Plan B.” Ask our team and your mentors for help. Become confident this is the right funding choice to commit to.

We know you want to get to the money part as quickly as possible. Just know that campaign companies with a clear offer, honest goals, and team alignment get to the money faster.  

Review fundraising options

Investment Crowdfunding is just one way to raise capital. There are many other ways to raise funds for your business. We encourage you to explore all options/avenues available to you.

Reflect on your legitimate business needs, the availability of funds, and “Cost of Capital” compared with the urgency of your situation. Your options may include: 

Notes about some of the options:

Bootstrapping, or self-funding, may be ideal for a business cash-efficient model (pre-sales etc) and the necessary skills in-house. It may not be practical if you need expensive equipment early, or if your competition has deep pockets and a jump start.

Other funding options have constraints due to the level of funds available, selection criteria, or cost of capital:

1. For example, Personal Savings require you to put your livelihood at risk. Credit Cards have high interest rates, and Bank Loans depend on personal guarantees. Kickstarter maxes out around $20K with average backer spending less than $100.
2. WeFunder.com is an Investment Crowdfunding Portal, but they only accept about 2% of applicants. Incubators, Angel Investors, or Venture Capitalists are also very selective only accepting 0.5% – 2% of those interested.
3. Awards and Grants are non-dilutive but may require retooling your
   business to fit their mold.
4. Private Placement sounds great, but the rich have gatekeepers and/or high (40% plus) equity demands.
5. Lastly, consider campaign tone and visibility: Campaigns may be public or invite only. Remember that fundraising may give your customers their first impression of you. Therefore, match the tone of your strategy with your overall brand. Consider that wacky “startup” antics during fundraising may not fit with your product/ service. In the rare instances when you have a genuine need to stay in “stealth mode” you could be tipping your hand to the competition with a funding email blast to 30,000+ people.

RESOURCE

You’ll find the items below in the Readiness Validation sheet to help you complete the Action Items in this section.

Funding Options
Readiness Questionnaire
Team Member Commitment
Comparables
Milestone Plan
Campaign Goals
Use of Funds Chart
Smart Goal Example

Use this link to download the sheet, or click the linked items above to work on them now.

Action Item

Validate your fundraising options by entering actual numbers for options you’ve considered. Use our reference data + your personal experience to evaluate the options.

Consider ranking or sequencing your options in the order that best supports your business goals.

Fundraising Options

Fundraising Options Notes