How to Use Equity Crowdfunding to Start Your E-commerce Business

According to estimates, e-commerce sales are expected to reach $4.5 trillion by 2021. Also, more than 50% of millennials would buy through social media, and 71% of consumers prefer online shopping. If you've done sufficient market research, reached out to and surveyed your potential audience, the results probably make you believe that your business idea will be blooming once you set things in motion and that it's the right time to launch your e-commerce business. Still, you're a bit uncertain about where to get enough funds to start.

Here's the good news—you can always opt for equity crowdfunding. Equity crowdfunding is a process where people invest in your early-stage company, which is not yet on the stock market, in exchange for shares, percentage of your revenue, partial ownership, and similar. Usually, people will invest if they believe that your company will do well in the future.


The Best Practices to Jump-Start Your Funding Campaign


Once you decide you're ready to delve deeper into equity crowdfunding, you might realize that there's more to it than just setting up a landing page. Once you launch the campaign, you'll have a limited time to reach the goal—and if you don't achieve it, you won't get any funds. Here are some tips on what you can do to prepare in advance:


Plan It Out


Once you and your team are on the same page, sit at your desk, and do the planning. You should take into account some of the most important things, such as finances, legalities, PR, content, social media, landing pages, and the crowdfunding platform.

Keep in mind that legalities and finances are part of equity crowdfunding that might be the most crucial aspect of your campaign. The US Securities and Exchange Commission (SEC) has strict rules and regulations that you'll have to follow to have your funding page up and running.


Test It Out


Set up your team and help your teammates understand that the time limit is critical for your campaign. Next, ask them to explore the crowdfunding platform you'll use to receive the funding. They should register as investors and go through all the steps to see if the platform provides a seamless user experience.


Decide on the Minimal Individual Investment


Setting up the minimum individual investment can affect the overall goal. Every company is different, and you should consult your finance team to make sure you're on the right track.


Best Equity Crowdfunding Platforms


Finding the best platform that meets your demands is essential. These platforms are the ones we work with most frequently and will provide you with everything you need:

  • Wefunder

  • StartEngine

  • Republic

  • Title3Funds

  • SeedInvest

  • Birchall


Conclusion


It might seem strange that you can make use of equity crowdfunding for your e-commerce business. Even though it may be a tedious task, it'll all be worthwhile once you reach your goal. With the right team and social media exposure, your campaign will gain traction, which will attract more users down the road. Your investors will most likely be your first customers, and it's up to you to provide them with what you've promised.


We've supported over 150 brands through equity crowdfunding campaigns, and we've worked with over 100 e-commerce brands on their advertising, content, and outreach for e-commerce sales. We're confident we understand both worlds well enough to walk you through a raise and product launch to success. We're always looking for breakthrough approaches to helping clients scale. We've recently found a way to partner with unlimited influencers with a capped and paced budget. It's an excellent time to raise capital through retail platforms because there is so much reflective, thoughtful traffic worthy of retargeting.