Investment crowdfunding was on the menu at the Howe Daily Kitchen + Bar – one of the selected venues to host Twin Cities Startup Week events. As nearly 45 attendees packed Howe’s patio area on a warm and breezy October afternoon, MNvest.org board co-chair, Zach Robins, led the attentive, yet eager crowd into better understanding investment crowdfunding and why it is the next frontier for small business financing.
Nearly two-thirds of the states and the District of Columbia have enacted intrastate, or state-based, investment crowdfunding through legislation, rulemaking and orders. How to Crowdfund and Not Fall Flat on Your Face event demystified investment crowdfunding by providing solid data to demonstrate that more entrepreneurs are making it part of their business financing strategy.
Unlike normal crowdfunding, entrepreneurs are more likely to reach their minimum raise by offering an equity stake in their business. TheCrowdFundingCenter, a research firm which tracks crowdfunding data in real-time, reported the average raised for a project in the U.S. is $35,082, while projects offered through Kickstarter raised $25,139. Since 2014, investment crowdfunding projects have generated roughly $3.8B in pledges worldwide with $3.5B raised – a 92 percent conversion rate.
While the current data on investment crowdfunding is promising, it is not a guarantee that every business with an investment crowdfunding campaign will reach their minimum fundraising goal. Successful campaigns require strong legal, marketing, and investor/public relations strategies.
Jade Barker, consultant with Silicon Prairie Portal & Exchange, a MNvest operating portal, shared her unique experience as a portal operator and an issuer. In particular, she offered her lessons learned in setting up a campaign and how to best work with a portal operator to ensure that the technology is easy-to-use for investors.
Event attendees were then urged to consider MNvest as a viable option when developing a fundraising strategy for startup capital.
Many thanks to Twin Cities Startup Week for allowing MNvest.org to host an event!
