That loud noise coming our way is the sound of billions of dollars pouring into new businesses through crowdfunding as soon as the SEC releases the JOBS Act rules
Tampa, FL (PRWEB) March 27, 2013
Crowdfunding Expert Kendall Almerico, CEO of ClickStartMe, has released a video with five tips for entrepreneurs who plan to sell equity in their startup business through crowdfunding once the SEC releases their JOBS Act regulations. As Almerico points out, when the SEC finally releases their rules as required by the JOBS Act, there is going to be an explosion in crowdfunding startup businesses on the internet, and entrepreneurs need to prepare now to be ready to equity crowdfund.
“That loud noise coming our way is the sound of billions of dollars pouring into new businesses through crowdfunding as soon as the SEC releases the JOBS Act rules,” the crowdfunding guru says. “Entrepreneurs need to be ready, so they will not be trying to play catch up when the rules are released.”
Since the Jumpstart Our Business Startups Act (the JOBS Act) was signed into law in April 2012, entrepreneurs and investors alike have been anxiously waiting for the SEC to announce rules to allow online equity crowdfunding of business startups. Equity crowdfunding, Almerico explains, is the process of raising startup capital by selling small amounts of stock online to a large number of people. At present, equity crowdfunding online is illegal, even though rewards-based crowdfunding on sites like ClickStartMe allow people to raise money to start a business as long as they do not sell stock or ownership.
When the SEC rules go into effect in late 2013 or early 2014, entrepreneurs need to be ready to jump on the equity crowdfunding bandwagon to fund their new business. For entrepreneurs who want to take advantage of equity crowdfunding, Almerico’s advice is to do certain things now. “With the emphasis on ‘now’ for a reason,” Almerico says. “If you wait for the SEC rules to come out to start these preparations, you will miss the first huge wave of money flowing into new startups.”
1. Build social media networks - now. Crowdfunding relies on getting the word out to potential investors, and there is no better way to virally spread the word than through social media. “Everyone involved in the business startup needs to personally be active on Facebook, Twitter and LinkedIn at a very minimum,” Almerico says. “Start building more friends and followers to personal social media pages now. It’s too late once after the company launches business social media pages.”
2. Interact with social media friends and followers - now. Just going out and adding hundreds of friends and followers to social media is not enough. Now is the time to engage them, Almerico says, so posts and Tweets are on their radar when the time comes to launch the crowdfunding project. “Just adding friends to Facebook, but not ‘Liking’ their posts or commenting on them, does not allow them to see status updates. The goal is to get on their timeline,” Almerico says. “Interact with as many people as possible now, so when it matters, they actually see the social media posts.”
3. Interact With Writers and Bloggers - now. No matter what the new business is going to be, there are already people writing and blogging about the field. Find those writers and bloggers and friend request them on Facebook, connect with them on LinkedIn and follow them on Twitter. “Getting a writer or blogger to eventually publish something about the crowdfunding project could make or break your fundraising attempt,“ Almerico notes. “Start to establish those relationships now, and make sure to add a @blogger or @writer when tweeting to give them a shout-out.”
4. Write a great business plan - now. Unlike rewards-based crowdfunding, where people often donate based upon pure emotion or a great video, equity crowdfunding is an actual investment into owning a business. “If you think investors are going to buy into a startup company just because of a cool video, think again,” Almerico says. “A proper business plan is a necessity to give the crowdfunding project the best chance of funding success.”
5. Get an accountant involved – now. Almerico notes that, in all likelihood, the final JOBS Act rules are going to require a level of professional financial review and before being allowed to use equity crowdfunding to start the business. Even if starting a business from scratch, the rules will likely require preliminary financial statements for the business. “These financial statements can take time to complete,” Almerico notes. “So get in touch with an accountant who understands the JOBS Act, and can help now.”
Crowdfunding expert Kendall Almerico is the CEO of ClickStartMe.com, the upstart crowdfunding site that “puts the fun in crowdfunding” and is a JOBS Act expert. Kendall Almerico is available for interviews, media appearances and speaking opportunities about any aspect of crowdfunding.