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The #1 Biggest Crowdfunding Mistake



I had the privilege of interviewing Darren Marble, CEO of CrowdfundX on crowdfunding mistakes and best practices. Crowdfunding emerged as a major funding source in the early 2000’s, increasing since the 2012 legalization of equity crowdfunding. It can be used to fund a wide-range of entrepreneurial ventures such as creative projects, community projects, inventions, and more. This past weekend in Los Angeles, United Talent Agency held an immigration rally that raised $70,000 through their crowdfunding campaign. Regulation A+ allows the public to invest in private companies. Reg A+ can raise up to $50 million BUT… MOST companies are not a good fit!

#1 Biggest Mistake: Too many young companies are opting for Reg A+.

Who is a good fit? Companies with:

  • Strong Social Media Following
  • Paying Customers
  • Passionate Fans
  • Easy to Understand Products

Two Key Strategies for Successful Funding of Reg A+:

  1. Storytelling - that achieves the trifecta of being authentic, emotional, and inspiring. Presently, there is an increase in passion investing. People want to invest in a company and CEO they believe in. They are seeking to align the vision, mission, and values with their own. Passion over ROI encompasses the new wave of investors.
  2. Digital - Identify your desired audience, how to reach them, and develop email and paid media. In the past 18 months email and paid media has proven to be very effective when done right. Facebook Advertising is a great tool, which allows you to follow four simple steps. First you gather your small target emails and people, then run demographics of these profiles, which will generate a larger lookalike audience. Finally, you can run your targeted ad campaign to this audience.

The Costly Misconception on Millennials

There is a huge fascination with the millennial generation, however targeting them for investments is a big mistake.

Millennials vs. Older Generation

  • Millennials = non-disposable income, no brokerage account, smaller investments
  • 30-40s = more willing to invest, brokerage account, higher income, larger investments

Where is the Industry Headed?

There was $190 million through Reg A+ in 2016. According to expert Darren Marble, we will see explosive future growth from larger organizations into the mainstream.

Projected Path of the Industry:

  1. Larger, Mature, Savvy Organizations
  2. Reg A+ IPO’s to NYSE and NASDAQ
  3. Investment Banks
  4. NFL or NBA Teams
  5. More mainstream

Mechanics Evolution

  1. Consumer Products
  2. Financial Marketing Firms
  3. Hybrid Deal Marketing
  4. Data Driven Future

 

Filing Duration

  • 90 days (3 months) on average
  • As early as 50-55 days to as long as 6 months
  • Cost has been driven down

 


Three Key Instructions and Questions as the CEO:

  1. Assess your need of PR and marketing. Does it fit your type of company? Do you want institutional and the crowd?
  2. Ask who are your references? And can I speak with them?
  3. Make zero assumptions, and do your due-diligence.

Learn more about investments, accounting and the future of finance:

Need help strategizing ways to your financial close process? We invite you to learn more by emailing us at info@avivaspectrum.com

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More about Darren Marble

Listen to Entire Interview

Darren Marble is the CEO of CrowdfundX, a pioneering financial marketing firm serving corporations and entrepreneurs across a wide mix of industries and geographies. The company helps clients to effectively architect and execute strategic equity and rewards-based crowdfunding campaigns that build brand equity and drive growth. Notably, under Darren’s leadership, CrowdfundX designed, produced and marketed the Reg A+ equity crowdfunding campaign for Elio Motors, which raised just under $17 million. Elio subsequently listed on the OTC Markets OTCQX under the symbol "ELIO," making it the first company in the United States to have completed a Reg A+ equity crowdfunding offer and list shares on a public exchange. At present, CrowdfundX is currently managing more than a dozen Reg A+ equity crowdfunding campaigns.