Here is Article statement by fundable
When planning your crowdfund, determining what type of fundraise is the best fit for your company is an important first step. There are a few factors to take into consideration when making your decision.
A successful rewards raise is a great precursor for equity
Rewards raises are typically smaller dollar amounts than equity raises but require more backers due to low pledge thresholds. A successful rewards raise is fantastic proof of demand to entice investors during a subsequent equity crowdfund.
Consumer-facing companies can offer great rewards
The key to capturing pledges during a rewards crowdfund is to offer something compelling like a pre-order of a new product. It’s a great fit for companies that have an established product or a set date that they will be able to produce and deliver their product.
A successful equity raise requires past traction
Investors aren’t looking for a tangible reward (like a product pre-order) in exchange for their cash. Instead, they want to see a history of traction and success facts that points to a profitable exit in the future. It’s important to establish credibility through your business plan, pitch deck, and financial documents to prove that your company is a great investment.
“Kickstarter has done good work to get people to know crowdfunding. Donation and reward models work for some purposes. People are ready to support some interesting or fancy project without real return on investment. At the same people are learning to expect real ROI too. The lending and equity crowdfunding are now really coming. Online market places can make it really significant, transparent and effective. And there will be many different instruments, securities and asset classes. Reward crowdfunding was the first step, now we move toward crowd investing. Crowd investing is to create real online investment markets to diversify investments.” Jouko Ahvenainen
This is the proof of CrowdFunding is ready for Its equity based.
Stock market and institutions lost an opportunity to deliver a IPO
In many cases CrowdFunding reward will be the 1st stage for CrowdFunding equity from now on.
CrowdFunding reward can de risk and boost CrowdFunding equity.
Pebble (11 Mil) showed us the potential, Star Citizen (37 mil ) gave us the possibility Oculus (2 Billion) broke the barriers delivered reward to equity based.
Enterprises / VCs / Angels will be watching CrowdFunding reward from now on.
Innovators will look at Oculus as a go to market model and even exit strategy
CrowdFunding in 2014 passed its teenage years. Now fund will begin. What is next?
Oculus got its branding and found its network just due to CrowdFunding equity base and no one can deny that.
Think this is a great testimony to crowd funding and should be highlighted as a consummate success. Certainly one can say that those patrons would have done better with an “equity” stake rather than a “sample”, but give nothing but credit to the entrepreneurs for moving down the path they did. Crowdfunding is not just about capital formation. More importantly, its about consumer acceptance of what an entrepreneur is developing and distributing. Their success is like the magic of a waltz — they nurtured, they turned, they gained traction on the dance floor, to where another suitor was looking to interrupt and steal the final dance. They pirouetted in a manner that made them real, without giving away any undergarments. How many entrepreneurs would love to have the capital to make it to the dance, and prance and romance, without giving any upside way. And then make it to the final dance, all two billion steps of it. Good show entrepreneur. You showed how the crowd is a viable alternative. Imagine if the VCs were there early — same color of money as the crowd. Would the exit be as good? Bravo. Steven Cinelli