equity
will need to rely on your own network to get the ball rolling before the broader crowd will notice you.
4. Value your business realistically Your company is only worth what investors are willing to pay for it. Many of the businesses we list fall down on over- ambitious valuations. Crowdcube does not offer advice on what the valuation should be, but it strongly encourages companies to be realistic and sound out opinion from people you know with a financial background. You must be able to justify your valuation.
5. Consider rewards In addition to offering equity in your business, rewards can be a powerful and cost-effective way to attract investors. A reward could consist of a discount or a free offer on your company’s product or service, for example. Rewards can be set at different levels and can be a good mechanism to incentivise higher levels of investment, get investors involved in your business after the deal, or even target potential customers.
6. Give regular updates Providing regular updates on your business as well as pitch progress is a great way to communicate with Crowdcube members and investors. Followers need to be converted into investors. Use updates frequently to keep followers informed about your company and the fundraising process.
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Back to contents Tips on raising equity
7. Provide tax breaks with EIS and SEIS Registering your company as compliant with the Enterprise Investment Scheme (EIS) or Seed Enterprise Investment Scheme (SEIS) offers investors substantial tax breaks and is a strong incentive for them to invest in your company. It is possible for investors to filter all the pitches on Crowdcube to see only those which are registered. All of the businesses that have funded on Crowdcube so far have been EIS-registered.
8. Use your network Crowdcube provides you with a platform to raise equity from investors. However, this is an active process for entrepreneurs, not passive! Getting the first 10 per cent of your target is the hardest part. You need to use your network and signpost potential investors to your pitch on Crowdcube. Positive momentum will attract more investors and followers. The companies that work the hardest in the fundraising are successful – however good your idea, business plan or background if you upload your pitch and do nothing you will not reach your target. n
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