Crowdfund Holdings Innovators (CHI)

Not every company that needs capital is a good candidate for crowdfunding.

That is the first thing founders and executives should understand. Crowdfunding is not simply a financing transaction moved online. It is a public capital-raising campaign that requires a company to explain its business clearly, activate an audience, support investor diligence, comply with securities rules, and market the offering over a period of weeks or months.

The best candidates are not merely companies that want money. They are companies with leadership teams that can turn a financing need into a credible public campaign.

A strong crowdfunding candidate usually has five things: a clear story, a reachable audience or serious marketing plan, a concrete reason to raise now, the budget to run the campaign properly, and the discipline to manage ongoing compliance after the raise.

A clear and compelling story

A company does not need to be simple, but its public-facing story does need to be understandable.

Prospe...more