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Start Your Business Startup Funding

4 Ways to Effectively Market Your Equity Crowdfunding Campaign

4 Ways to Effectively Market Your Equity Crowdfunding Campaign
Credit: Atstock Productions/Shutterstock

Equity crowdfunding, a creation of the 2012 Jumpstart Our Business Startups (JOBS) Act, is an alternative way for startups and small businesses to crowdsource capital from investors and consumers who are passionate about their products or services. However, running an equity crowdfunding campaign can be difficult; there are many startups vying for the crowd's dollars, and making your voice heard in a sea of exciting ideas can be difficult.

The success of these types of campaigns largely rides on how you market your company to the crowd. Establish a unique brand and a voice that cuts through the clutter, and you'll get you the capital you need to get moving. Fail to forge an essential emotional connection, and your equity crowdfunding campaign could end in failure. Here's how to make sure your crowdfunding endeavor pays off in both capital raise and brand awareness. [Want to start an equity crowdfunding campaign? Read this first.]

The first step toward any successful equity crowdfunding campaign is to understand your audience. What are their needs or desires? Why would they support your product? Even more importantly, why would they be passionate about your product? Forging an emotional connection starts with understanding your potential supporters and catering to their needs, both with a quality product and impactful storytelling.

"Emotional connection really comes when you understand your audience and the people you're trying to reach," said Chris Westfall, a pitch strategist and author of "Bulletproof Branding" (Marie Street Press, 2014). "Oftentimes for entrepreneurs, this means look for the impact. Giving people something to believe in, that emotional connection, that's what [draws the crowd]."

Reaching the correct audience is also a matter of medium and messaging, said Mark Stanich, president with the ELEQT Group. High-quality photos and video are huge boosts when it comes to marketing ideas; allowing potential investors to place themselves in the shoes of a satisfied customer brings them one step closer to understanding the value of your idea. It's also imperative to speak to the things that make your idea stand out from the rest.

"In terms of actual messaging, why is it different than competition? How does it fit a true need or desire for your lifestyle? Is it simple to use? [Does it] free up time to do other things? Make life easier?" Stanich said. "There's this area of social investing that's becoming very important … If you can speak to those things, you build this emotional bond. Obviously, financial return is important in equity crowdfunding, but I think that's not enough. I think many people want to support something they really believe in."

Keep your message simple. Overwhelming audiences with too much information or the slew of benefits your product provides – even if they're all valid – is a surefire way to lose their attention. The shorter and sweeter your pitch, the better.

"You need a simple, distilled description of your product," Stanich said. "People often launch something and love it and want to go on and on about it, but that's complicated and noisy. There are lots of other competing products, so you need to keep it very, very simple.

"As you go further down the path of investment, you can flesh the benefits out and talk more and more," he added.

Consistency and simplicity go hand in hand. That means aligning your brand with the right platforms, speaking to the right audience with the right message, and selling the right idea, Westfall said.

"You want alignment every step of the way," he told Business News Daily. "Choose the right platform and you'll reach the right people. But if you have the right idea in the wrong platform, that still adds up to the wrong idea. You want to be careful and deliberate about picking your alignment, from the platform you choose, to the way you approach it, to the methods you use."

Without a clear brand and associated message for your campaign, it's easy to miss opportunities to engage potentially interested investors. On the other hand, if your brand is successful and consistent, it will be much easier to initially grab people and encourage them to investigate your idea further.

"A broad crowdfunding platform gives you a place to stand in the market square, but they don't give you a megaphone," Stanich said. "Successful campaigns have [an] existing connections base already with people passionate about [their] product, or if they don't already have a big base to tap into or influence, they build an emotional bond with passionate people. That's when you start to get viral pickup … That's when you see successful campaigns."

A strong brand clearly and succinctly expresses what your company is all about. Strong brands cut through the noise to grab the audience and immediately shed light on the character of the product or service. Once hooked, the audience will naturally gravitate toward learning more.

"Simply saying the market for this is huge without a way to connect your … idea to that market means you're missing a step," Westfall said. "It's not enough to have an idea in a gigantic market. The key to what gets funded is how you connect this hungry market to the idea that satisfies it."

The equity crowdfunding industry is changing fast, so being able to pivot and adapt as the marketplace shifts is imperative. For example, Stanich said platforms are moving from a generalized "supermarket" model to more segmented verticals. This can benefit brands by helping them target those investors and consumers who are specifically interested in their type of product or service.

Stanich used the example of Scottish craft beer company BrewDog, which ran a successful equity crowdfunding campaign with ELEQT this year. By building an emotional connection around its brand and catering specifically to the craft beer crowd, BrewDog was able to raise the capital and brand awareness needed to successfully break into the U.S. market with a groundswell of support.

"Their character is great," Stanich said. "They really created a whole persona around what this was, and it's so innovative that people really respond to it."

Adam C. Uzialko

Adam received his Bachelor's degree in Political Science and Journalism & Media Studies at Rutgers University. He worked for a local newspaper and freelanced for several publications after graduating college. He can be reached by email, or follow him on Twitter.