What should the entrepreneur pay attention to?

In 2012, Mr. Obama signed the JOBS Act (Jumpstart Our Business Startups Act, which translates into the Entrepreneurship Assistance Act), which allows start-ups to raise $1 million trillion and below, Allow regular retail investors to buy a limited number of shares through legitimate channels.

The bill's entry into force has brought chicken blood to many entrepreneurs and investors. Young, thoughtful entrepreneurial teams are choosing to raise money on the platform. But a few years down, waves, we have been able to witness a lot of successful public projects, but also witnessed a lot of drubbing and return cases.

At present, the financing model based on public finance is mainly divided into two types, one is based on the award of the public platform, such as the famous Kickstarter and Indiegogo. People on these platforms to support the public-funded projects, you can get the corresponding rewards. Many companies start and succeed on such platforms, such as Pebble, Oculus Rift, etc.

And the other is based on the stock-raising platform, more representative of the FundersClub. Investors on the platform for the Project capital investment, equity financing in the way to finance, in this way to achieve financing of the representative company has Coinbase and Instacart.

Of course, there are also differences in the projects that the two financing approaches face. Start-ups need to take their own specific circumstances into consideration when choosing a platform. Incentive mode is to convert potential consumers into their own investors, if this option, can effectively reduce the initial consumer demand for products at the risk of insufficient.

If startups want to make reservations about whether people are interested in the product, or if the product hits a consumer's pain point, using the reward model is a good choice. Startups that usually do hardware development choose this approach.

But if the start-up needs more traditional, decentralized investors, the equity platform is a better choice. On the equity platform, start-ups want to find experienced investors who can provide feedback to the company or provide networking. And on the incentive platform, the investment is usually based on the same interests or professional, or is attracted by the product creativity of the majority of the retail.

The advantage of being on the right platform is that it can make the process of raising value-added capital more efficient. In the past, people have been worried about whether this approach will replace the traditional mode of venture capital, or whether the public start-up companies in the subsequent search for VC investment will have a bad impact.

But now the VC wants start-ups to seek financing from them before they have achieved the initial financing through the public sector. Because VC can from this financing project, visit the investment plan, obtain the information of the start-up enterprise, from the whole public raises the process to understand whether the entrepreneurial team meets their investment expectation.

But before launching the campaign, the entrepreneurial team had to stand on the investor's side and have a chance to run their ambitious business plans smoothly. The entrepreneurial team should adopt a better way of presentation in order to attract experienced and powerful investors:

Figure out who your investors are and what your relationship is.

First, the entrepreneurial team must find out who the investors are under the line and understand the whole process of financing.

In the reward platform, the entrepreneurial team gets the recognition of the product, but be aware that these supporters are your customers and don't take them for granted as fans. They don't want to help you solve the problem of late delivery or budget burns, but ask when your product will be available.

On the stock-raising platform, investors are more concerned with what the entrepreneurial team can give to the real commitments, what the team's future goals are and what needs to be met.

The entrepreneurial team must be clear about its positioning to meet the needs of different types of investors.

What to show

In the introduction of the company and its products, the first to highlight the product attraction, in order to hit the investors pain point to attract investment interest.

Second, to the company's vision, services, etc. to make a clear description, to facilitate rapid understanding of investors, the main content must cover all the key points, all you think can attract investors to write the content. Some specific creative points may need to be kept secret, but in practice the execution is more important to most startups than creativity.

And on the incentive platform, the entrepreneurial team should also pay attention to the transparent product pricing. In the hardware development process, there will be a lot of people caught off guard problems. And the entrepreneurial team must be sustainable to the perspective of the product pricing, covering the production, logistics, after-sale, including the full cost. Instead of making investments without cost.

Product planning, consumer expectations management

The founders of the award-type project were the two most frequently made mistakes: one was a lack of planning and the other was that the actual product could not meet the expectations of its supporters.

This requires that the founders have to focus on what really matters: is the team configured properly? is the operational process and supporting infrastructure sufficient to support the delivery of the target product? Does the product have a substantial competitive advantage?

At the same time, the entrepreneurial team is best to establish a good communication mechanism with the investors. The best way to manage your supporters ' expectations is to keep talking to them and ask for feedback. Once the supporters understand how the product was created, they are better able to understand the difficulties the development team has encountered and to recognize the efforts of the development team.

In 2013, Kickstarter's successful project reached 19,900, raising $480 million trillion, although many of the projects have failed, but the public-chip model is still an important direction in the future. The scale of public investment is still growing, and it is likely to be one of the main sources of capital injections for start-ups, in the direction of Internet-centric access.