You own a small business that’s ready to scale. All you need is a boost in capital, something between $3 million and $75 million. While you’re not quite in the position to take your company public, you also realize that regular crowdfunding platforms won’t get you the level of capital you need to get to where you want to go.
What you’re looking for may be situated in the space between both capital raising options, something like a “mini IPO,” aka, a Reg A+ offering. If so, it just may be the sweet spot that can help you get the capital investment you need without having to go the route of a full-blown public offering.
But how do you actually succeed in the regulated crowdfunding space? In other words, what do you need to already have in place to increase your chances of raising the capital you need to scale your business? Here are a few tips.
A jaw-dropping product that differentiates your brand from others
It isn’t easy for businesses to stand out among their competitors. But those who offer outstanding products that can also differentiate them from the crowd are more likely to reap the bigger reward: namely, the conversion of customers into “brand ambassadors.” For any company looking to scale, especially in the regulated crowdfunding space, well-differentiated products and brand ambassadors can do much to amplify your presence in the marketplace. Both are absolutely critical to your crowdfunding success.
A large and well-engaged customer base
Look to your customers as a natural source of capital investment. They know your products the best, and they’re likely to be the most enthusiastic early adopters to benefit from your company’s success.
That being said, there is a nuanced difference between customer satisfaction and customer engagement. While satisfaction helps to keep customers coming back to buy more products or services, customer engagement can help elevate a company’s status to that of a reliable authority in a given industry or market. Engagement is what turns a user base into brand ambassadors. And companies that have a strong brand ambassadorship are likely to be more successful in garnering Reg A+ investors than those that do not.
A clear, unique, and proven value proposition
Beyond your customer base, there are others who may be looking to invest in a company’s Reg A+ shares. Should they learn about your potential offering, you’d want to make sure that your company’s value proposition is crystal clear. After all, it’s the centerpiece of your overall investment case.
This situation also highlights a major advantage that customer-facing companies have over businesses that don’t directly engage their end-users. Your company’s messaging can be channeled directly to those who benefit from it. That being said, if you have an outstanding product, a clear value proposition, and an engaged user base, your company may be well-positioned for a strong Reg A+ launch.
A platform on your site for all potential customers and investors to see
Not all prospective or soon-to-be investors are actively looking for an investment opportunity. Some of these people might be your customers, social media followers, or brand ambassadors. But if you’re not facilitating the process to promote and make accessible your Reg A+ offering, then you’re missing out on a key channel through which you can reach potential investors.
Granted, there are other online marketplaces through which you can offer your Reg A+ shares. Some companies can even file to list their Reg A+ shares in the equities market. But why offer your shares among thousands of other companies in a virtual marketplace when you can also offer shares directly through your website using a regulated crowdfunding platform that’s customized, functionally and aesthetically, to suit your brand?
Guidance from an experienced BD can be golden
Whether you have a large ecosystem of customers or just enough customers to experience moderate growth, guidance from an experienced Broker-Dealer (BD) specializing in regulated crowdfunding can make a big difference in your capital raising goals.
An experienced BD has onboarded hundreds of companies seeking to issue Reg A+ offerings. It knows what has worked best and what hasn’t with various issuers. A BD understands the importance of friction reduction, marketing, PR, financial publication inclusion, co-listing on other platforms, and syndication.
And most importantly, an experienced BD can present you with a transparent and cost-effective solution designed to keep more funds in your pocket as you seek to raise capital and expand your business. Watching your bottom line in the Reg A+ offering process is all too often an overlooked matter. Truth be told, it can make or break your offering.
If you have any questions regarding this process, feel free to contact us here at the Dalmore Group. As one of the leading firms in the regulated crowdfunding industry, we can help you decide which form of regulated crowdfunding might best match your capital needs (Reg A+, D, or CF), in addition to providing expert guidance and resources to help make your capital campaign a success.
