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  1. #1
    Senior Member
    Join Date
    Oct 2016
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    140

    Equity Crowdfunding and Venture Capital, More Friends than Foes?

    Equity crowdfunding is just starting to get its feet off the ground, but some trends are already becoming apparent in the industry.
    Read more here: https://www.fool.com/investing/2017/...ore-frien.aspx

  2. #2
    Member
    Join Date
    Jun 2017
    Location
    Roswell
    Posts
    48
    Equity crowdfunding and Venture Capital are two different ways of raising funds, on some aspects you can choose, on some others you will not have the choice. It will mostly depend on the stage of development of your company.

    On your side

    Equity crowdfunding with no intermediary financial vehicle (such as a holding) will gather small investors who will not be as involved as VCs in the every day life of the company. These investors are more looking for an investment opportunity than a given value proposition.
    Investors in equity crowdfunding will not have much negotiation power than VCs. Regarding dilution, term sheets and governance.
    For these reasons equity crowdfunding is a good opportunity.

    On the investors side

    VCs are looking for traction, you will have to provide (given your sector) at least a proof of concept, turnover, a pipeline of clients and some metrics. Investors in crowd equity will be more demanding.
    VCs are more likely to help a lot! Venture Capital is not just about money but also, (and first!) experts that will provide expertise, connections and ideas of growth relays.
    So what is your current strategy? Preserving equity? Gathering expertise? Growing fast?

    In any case, bootstrapping your company will always be the way to grow first before meeting relevant investors.

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