Who is equity crowdfunding for?Feb 21, 2022
In order to sell a part of your company, you can’t be operating as a sole trader. Equity crowdfunding campaigns are for registered, limited liability businesses that want to offer shares in their companies in exchange for investment.
Companies can be pre-revenue, but you need some traction under your belt - you’d be unlikely to bring on any substantial investment with simply an idea. There’s no denying that having recurring revenue is attractive.
The campaign needs to be led by a senior member of the business, ideally the founder(s). Although you can, and should, get other team members involved - particularly in terms of ‘spreading the word’ to a wider network, it’s really important that the person who takes the lead is actively involved in the business’s day to day key decision making.
'Equity crowdfunding campaigns are for registered, limited liability businesses that want to offer shares in their companies in exchange for investment.'
There are no real restrictions on industry type and both B2B and B2C companies can and do crowdfund. Although you’re probably more likely to come across a B2C campaign when you’re perusing the platforms, B2C campaigns have had much success. In fact, sometimes having a slightly different proposition can work in your favour.
Rather than thinking about ‘who’ can crowdfund with regards a type of business, think more about the structure of a company, how it is set up, and how attractive the proposition is to potential investors.
Try out our readiness tool today to see if now is the best time for you to equity crowdfund.