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Do’s and Don’ts of PR for Equity Crowdfunding

November 28, 2016

 By now, everyone realizes that most crowdfunding campaigns need some kind of exposure to get the traction needed to attract investors. Outside of private conversations there are several things that you can do to build your brand awareness during a period of raising funds.

However, equity crowdfunding does NOT follow the rules of what we have come to think of as crowdfunding on platforms like Kickstarter and Indiegogo. Solicitation rules and regulations for fundraising should be examined prior to starting any campaign. That doesn’t mean that you can’t have an aggressive PR strategy, it just means that your PR strategy should focus more on your long-term brand rather than your short-term raise.

Here are a few key tips on how you market your equity crowdfunding campaign without breaking the rules.

DO NOT confuse equity crowdfunding with rewards-based crowdfunding (Kickstarter/Indiegogo). All crowdfunding is not created equal and there are communications and compliance considerations when it comes to rewards vs. equity. The best way to attract attention to your offering is to focus on the company as a whole and explain how your values and mission fit into customer’s lives. While on Kickstarter the emphasis is placed on t pricing and rewards, equity crowdfunding rules are fairly strict in that if you mention any of the offering’s terms you are limited in how you can promote to a short description of the business. The key is to use PR as a tool to broaden awareness about your company, in turn leading investors to want to learn more without talking about the specific offering terms.

DO NOT neglect to hire a securities legal team to review your offering and materials so that you are in compliance during your raise. The last thing you want is to invest money in publicizing your brand and get shut down or fined. Many people think they can do it themselves. If you’re not a lawyer, I wouldn’t recommend it. There are many low cost options to get your materials checked out before publicly posting your offering on any platform.

DO advertise your company, product and/or brand. Talking about what you are creating, how and your corporate mission is a great start to publicize your brand. Regulations allow for paid advertisements, so carefully get your ads reviewed by equity crowdfunding PR partners or legal professionals before running ads live. You can also create targeted audiences on platforms like Facebook to reach a wider array of potential investors. Focus your ads on your brand. Remember all your communications are subject to anti-fraud law and you have to be very careful in any promises that might be considered by the SEC to be promissory or intentionally misleading.

DO NOT advertise your offering and specifics. Advertising is restricted during your raise to only the ability to drive traffic to the place where investors can learn more. Focus any ads or calls to action to your website where investors can learn more on their own. Remember any ads should really be generating traffic and attention to the overall brand. You do not want to advertise your offering; this will land you into legal trouble quickly. A great way to get ahead of this is building a substantial email list of potential investors in advance with the ability to reach out to them once you start fundraising. A good crowdfunding platform will have access to accredited investors via their newsletters and email lists as well.

DO use crowdfunding to raise funds. The newest regulations in crowdfunding are enabling companies to raise funds and get the ramp up they need to validate proof of concept in the market. With Regulation CF available to companies, take advantage by raising capital from friends, family your network and others that are interested and passionate about your project. Crowdfunding is the perfect way to raise awareness and build a community around your brand even further establishing brand champions to support your long-term goals.

Aggressive PR can support great crowdfunding success while achieving funding through equity crowdfunding. Again, equity crowdfunding does not follow the same rules as a Kickstarter or Indiegogo campaign, however more and more startups are finding incredible opportunities with equity “crowdfunding” to drive company liftoff and success.

 

This post was written by Ronjini Joshua from thesilvertelegram.com, a PR agency specializing in crowdfunding campaigns. All views and opinions in this piece are that of the author, and not necessarily those of FlashFunders.  

Ronjini Joshua

Written by Ronjini Joshua

Principle of The Silver Telegram, Public Relations Pro, Crowdfunding/Startup Expert and Speaker, Brand Advisor