You're looking for "the right investor". Your competition is looking for the right investor. Everyone in your accelerator or incubator is looking for the right investor. Your right investors is also looking for the right investor. Everybody is looking for the right investor! But why? Especially when customers have more money than VCs and Angels...
Oh, the reason that your right investor is looking for the right investor is that:
A. General Partners crowdfunding from a small pool of Limited Partners. Thats how you know crowdfunding works. Sharks do it all the time, with each fund they start they spend years raising money from a small pool of investors. The difference for you is, that you now know better than to pool capital from a pool and know instead to source it from the ocean that is The Crowd.
B. Funds generally want to invest after someone else has. As though due diligence gets solved because someone jumps off the cliff first, which gives them the courage to follow without checking the height of the fall or the speed at which they'll decelerate into reality.
At any rate, about 3Xs a week someone reaches out to me and says, "Can you help us find the right investor?" When what they really mean is, "Can you introduce us to a shark that will put us on their dinner menu?". If they've been at it for over 24 months and been rejected by a couple of hundred Sharks and Angels alike, what they really mean is, "We are desperate! We'll take anyone's money regardless of how FUBAR the terms are." DYK that less than 2% of all startups receive VC investment? The real shocker is that really less than 1/2 of 1% actually need it.
What businesses actually need is Customers. Customers have this thing called money. And when a business accepts and receives a Customer's money they do so in a process called "Sales". Sales are a beautiful thing because sales are the lifeblood of any Company. Because sales create revenue! There is literally not a business on the planet that doesn't need to generate revenue. Revenue, revenue is the best capital in the known galaxy. Too, another beautiful feature of sales revenue is that the money earned via sales is earned, not raised. Businesses don't have to pay back money they've earned. However, raised money isn't earned and has to be paid back in multiples of 1000X or more.
The Right Customers Are Also Your Business' Right Investors
The strategic value of investment crowdfunding is that it is actually a marketing campaign to generate two separate kinds of money flow: Sales Revenue and Investment Capital. As when you launch your crowdfunding campaign you're not just offering investors an opportunity to buy shares or invest in your company. No no no. You are first and foremost selling your business' goods, products, and/or services. Then! As an after thought, you're raising investment capital for your business.
In truth, recruiting customers is the #1 point of crowdfunding. Followed by:
#2 increasing sales revenue.
#3 creating lifelong brand loyalty.
#4 reducing customer acquisition cost due to word of mouth advertising.
#5 supercharging organic growth.
#6 maybe...to raise capital.
Customers will always be your business' right investors. The question then is, "Have you given your potential, current and future customers the opportunity to invest in the business they love so much they're already a customer of it?" If not, crowdfunding is calling. And it very well maybe where all your customers and investors are waiting for you.
About the Author
Samson Williams is a serial entrepreneur and accidental investor. When not starting business with his enemies (“Entrepreneurship is hard. I only recommend it to my enemies.”), Samson is an Adjunct Professor at Columbia University in NYC and University of New Hampshire School of Law where he teaches on blockchain, cryptocurrencies and the Space Economy. Samson is also President of the Crowdfunding Professional Association and investor into two investment crowdfunding platforms Brite.us - CrowdInvesting Done Brite and GoingPublic.com. For more information on Samson visit www.SamsonWilliams.com and follow him on social @HustleFundBaby.