can chew. You may potentially go from start up to full operating
mode very quickly.”
Capacity is just one challenge entrepreneurs need to consider
before launching an equity crowdfunding campaign. Beyond that,
your team, people, processes, financial reporting and financial
reporting requirements must be in order and its advisable to have
at least 30% of your overall required capital in hand.
After the business fundamentals are solidified, the next step is
to select a suitable portal and review its requirements. Reputable
equity crowdfunding portals should have a relatively extensive
vetting process to ensure both the investors and the businesses
looking for funding are protected from fraud.
Once you’ve decided how much you need to raise, and in
what timeframe, the next step is to speak to your accountant about
what the financial reporting requirements are, as people will now
be scrutinizing your business plan, budgets and finances. If you
don’t have the skill set to ensure those are in order, it’s essential to
work with a professional.
Having your legal counsel and accountant involved when you
consider equity crowdfunding, is critical. This is a halfway step
toward being a public entity; somewhere between a reporting issuer
and a private company. You should be well informed on how issuing
equity will impact your reporting, governance and business plan.
Launching an equity crowdfunding campaign is very distracting,
and it can take you away from your core business operations for
anywhere from three to six months, as you deal with marketing,
investor relations and of course, ensuring you are being transparent
and professional. It will be very important to ensure you have a solid
business plan in place to guide you through the process.
For more information contact:
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