How I Raised $1 Million in 30 Days with Equity Crowdfunding You can raise a million, too. Here's how to be successful with equity crowdfunding.

By Murray Newlands

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There's an art to raising money for a startup. I recently joined Commerce AI as Chief Strategy Officer, and my role has two main functions: fundraising and marketing. My goal in the first 30 days was to raise a million dollars from crowdfunding. This can be a viable goal for your company as well. Here's how.

Equity crowdfunding.

Under the Jumpstart Our Business Startups (JOBS) act, there are a number of routes to crowdfunding. The starting point is a Form C round, which in essence means you can raise $1.07 million per year -- yes per year -- from non-accredited investors. This means anyone can invest over $250 at a time. This time we worked with accredited investors only but most people will start with a Form C round.

Related: SmartNews Announces the Close of a $92 Million Round of Funding

This model is like Kickstarter, but you give backers equity rather than a product. The equity can be a convertible note, a safe note or a fixed price round. If your goal is to raise more than $107,000, an independent CPA must review your company's financials for the past two fiscal years, or since incorporation.

Aligning the stars makes millions.

You need to make sure that your startup is ready for fundraising. Smart investors on crowdfunding platforms look for a few key factors, and we had some of those.

It is all about the story. Investors want to invest in a company that is going to be a billion-dollar company. Do you have a credible path to becoming a billion-dollar company? For example, our CEO and founder had a successful previous exit. People like to back winners.

A strong team is also important. Ours is comprised of Stanford and MIT PhDs who have been working on AI technology to solve really hard problems.

Initial product/market fit is another thing investors want to see. We already had substantial revenue from major brand name customers like Unilever, Walmart, Rakuten, USPS, Chanel, Midea, Netgear, Cisco, and Coca Cola.

A sales process that's growing that list of customers is also a big plus. We were nearly at break-even last quarter, which assured our investors that their money is safe with us.

No company can have all the boxes checked. But the more positive signals you have for investors, the better. Investors want as close to a sure thing as possible.

Related: Digital Media Startup Brut Raised $40 Million in Series B Funding

Creating a winning campaign.

Several good equity crowdfunding platforms are available, such as StartEngine and Republic. We chose to use SeedInvest.

It's important to create a convincing writeup and video explaining what you do and why people should invest. You should think of this as a landing that advertises your product, only you're selling to investors rather than customers.

We focused on selling the opportunity and potential of the company, not the product. You might have an ingenious widget, but will your business become a billion-dollar company? It's a big market out there, and investors need to be convinced that you're going to be the winning business.

Pre-seeding the campaign.

Because investors like to follow other investors, we pre-seeded a winning funding campaign. How? We had some investors with larger checks lined up to invest in the campaign. This enabled us to show strong initial traction when we launched. It also helps that crowdfunding platforms highlight companies that are gaining traction. This leads to attracting even more investors.

Always improving.

Your campaign is never "done." We kept working hard on improving our story. As a startup seeking investment, your goal is to sell your company's potential for future growth. Getting that story absolutely right is very important. You should be practicing, thinking and brainstorming your story with as many people as possible. It should be something you're always trying to improve.

Always marketing.

During the campaign, we made sure we had great company progress updates. We gained press coverage and shared it with investors. Before long, we signed Unilever as a client.

Related: OurPlace Has Raised $2.35 Million

We held in-person investor events in San Francisco and Silicon Valley. While not many people came out to these events, they became part of our broader marketing. A global audience knew we were running successful investor events. We also individually reached out to lots of investors, and we ran a campaign to previous investors to re-invest in the new round.

The campaign enabled our company to grow faster than before and with more capital. We targeted $700k for our campaign and ended up closing at $1.3 million. Forty percent of that amount came in the last few days.

Following these simple tips can help you get your first million easy!

Murray Newlands

Entrepreneur, business advisor and online-marketing professional

Murray Newlands is an entrepreneur, investor, business advisor and speaker. He is the founder of ChattyPeople.com chatbot builder tool and Sighted.com. Read his blog MurrayNewlands.com.

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