HookVerbWiki
Menu
HookVerb

Menu

Start raising

Glossary

Equity crowdfunding

Definition of equity crowdfunding, the Regulation CF and Regulation A+ offerings it runs on, and why marketing decides how much a raise brings in.

Equity crowdfunding is raising capital by selling shares (or other securities) to the public online, typically through a registered funding portal or broker-dealer, so that ordinary investors can buy in alongside accredited ones. In the United States it runs on two exemptions: Regulation Crowdfunding (Reg CF), which lets a company raise up to $5 million in a twelve-month period, and Regulation A+, which allows up to $75 million with more disclosure and a qualified offering circular.

Unlike a venture round, an equity crowdfunding raise is a public campaign. The offering page is a landing page, the investor is a customer who has to be found, convinced, and reminded, and the total raised is a function of the marketing behind it: audience, message, paid and owned channels, and the funnel that turns interest into a completed investment. See Digital marketing strategy for the decisions that come before the campaign, and Product crowdfunding for the rewards-based campaigns that are often the step before an equity raise.

The shape of a raise

Money arrives at the open and at the close, with a long middle in between, so a raise is usually planned in four parts:

  1. Before the offering opens. An audience is built through Testing the waters communications, the story is settled, and tracking is verified. This period decides how the first week goes.
  2. The open. The warm list converts first, and its early investments are what every later visitor sees on the offering page. Where that list came from is the subject of Investor acquisition.
  3. The middle. Paid channels are tested and budget follows the evidence.
  4. The close. A real deadline, run as its own campaign.

Measuring it

The metric a raise is run on is cost per completed investment (see Investor acquisition), not cost per click or cost per lead. The drop-off between a started investment and a completed one, which happens on the portal's own domain, is where most raises quietly lose money, so it is tracked separately from the traffic that produced it.

Further reading

Topics:glossarycrowdfunding

Related articles

  • Regulation Crowdfunding (Reg CF)

    Definition of Regulation Crowdfunding, the size and investor limits it carries, how an issuer may advertise a Reg CF offering, and what that means for the marketing around a raise.

  • Regulation A+ (Reg A)

    Definition of Regulation A+, the difference between Tier 1 and Tier 2, the reporting it requires, and how a qualified offering may be advertised.

  • Lead funnel

    What a lead funnel is and the stages HookVerb manages between the first click and the sales conversation.

  • Digital marketing strategy

    Definition of digital marketing strategy as HookVerb uses the term: the decisions about positioning, messaging, channels, and measurement that precede execution.

  • Product crowdfunding

    Definition of rewards-based product crowdfunding on platforms like Kickstarter and Indiegogo, how it differs from equity crowdfunding, and why a backer list matters to a later raise.

  • Testing the waters

    What testing the waters means in a securities offering, the rules that permit it under Regulation A and Regulation Crowdfunding, and why it is how most raises build an audience before launch.

Show all 13
  • Investor acquisition

    Definition of investor acquisition as performance marketing for a public raise, the audiences it works through, and the metrics it is measured on.

  • How to market an equity crowdfunding raise

    A crowdfunding raise is a marketing campaign with a securities offering attached. What decides the total, who owns it, and what to have ready by launch.

  • Who actually regulates equity crowdfunding?

    Not one regulator but several, each with a different job. A map of the SEC, FINRA, the states, the FTC, and the ad platforms, and what each can do to a raise.

  • HookVerb

    What HookVerb is, who founded it, how it advises issuers on an equity crowdfunding offering and builds the technology under it, the services it offers, and the issuers it works with.

  • Equity crowdfunding vs traditional ways to raise money

    Venture, debt, friends and family, a private placement, or a public raise. The real difference is what each asks of the company, not how much it pays.

  • Bryce W Jones

    Founder and CEO of HookVerb, an equity crowdfunding consultancy in San Diego. Marketer and engineer, more than a decade selling consumer products and securities to the public online; previously Head of Digital Technology at BOXABL.

  • Raise Owner

    Definition of a Raise Owner, the one person who directs a crowdfunding raise and makes or gets every decision it needs, quickly.

Last updated .