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If you’re part of an accelerator or startup, the Securities Exchange Commission granted you a new way to approach funding in 2014: The right to solicit a broader range of investors. In response to the JOBS Act, the SEC is now allowing startups to advertise their stock to investors. Many people believe this gives companies free rein to go after money— an assumption fueled by crowdfunding platforms like Kickstarter and Indiegogo.
In reality, you and your legal team have to take more precautions to ensure the buyers are accredited, which essentially means that they’re financially capable and know what they’re doing. If you don’t know a buyer, you must do the appropriate research to confirm the investor is accredited.
Marketing to Investors
Besides researching the legality of an investor, startups and accelerators also have to work on their marketing strategies. Founders must know how to attract the right investors and then reel them in with the right pitch.
Here are three marketing tactics to help you find the right investors.
- Leverage the power of social networks. LinkedIn is a great place to start looking for potential investors. Try posting enticing information or even direct messaging some of your connections.
- Look into crowdfunding websites. Crowdfunding websites curate and position business concepts to a community of potential investors. If an investor is interested, his contact information is passed on to the startup. Research the crowdfunding sites that fit your industry best.
- Utilize community events. Community and public events are excellent ways to solicit interest in an exciting business opportunity. By getting exposure at contests, trade events, and other public displays, you can generate investor curiosity.
Find out more about how to pitch on the next page …
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