Raising money from your community takes a different approach.

HTF_AmyPearlSome of you may have heard of our InvestOR Ready Accelerator, a program designed to prepare entrepreneurs for a community public offering. The truth is, it could more aptly be called a ‘slow’erator. While it jumpstarts some things for entrepreneurs, it reveals other things that need to be examined more closely—such as financial projections, planning your market strategy, and how much money you really need. Many of the entrepreneurs we have worked with come into the program feeling confident about their business plans, but they often realize they’re not quite ready as they thought.

 

This “big reveal” is the real power and value of our accelerator. And here’s the trick—doing a community public offering, the act of asking your community to invest in you and believe in you, is an entirely different experience than asking an angel or bank for money. Sure, there are overlaps in what you need to provide, but there’s a difference in the response you get. When you ask a banker, a venture firm or an angel investor for money, they are experienced in reviewing plans and often know much more than you do, so their questions are extremely targeted. However, when you put up a community public offering, you suddenly have as your market your Uncle Joe, your next-door neighbor, and a kid from the next town over. The questions they ask turn out to be some of the best questions an entrepreneur can get, often even being the hardest to answer.

The crowd comes first.

The first thing to understand about a community public offering and our accelerator is that dealing with crowdfunding includes crowd-gathering and crowd-building. So we start with helping you build your crowd. Establishing campaign ideas for both your fans and your investors as soon as possible is critical. We talk about building both your reputation and recognition through social media, email, and word of mouth.

 

We also set expectations for the work ahead. Founders and small teams are already trying to launch or grow a business and raising money is often a full-time job. We know what it’s going to take, and so we help you prepare for that work.

 

The second thing we look at is the readiness of your business for raising money. What does it mean to be ready to raise money? It means being ready for those basic questions and ready to answer them in the clearest way possible. It turns out this is the most difficult thing for entrepreneurs to do. Tell me in one sentence what your business is about. I’ll bet you can’t do it. Why do you need money? Specifically. Exactly. What is your market and how do you know?

 

We also help you confirm 1) what kind of entity you should be (or become) that is right for your business’ future, and 2) what kind of financial deal you should be offering. Legal and financial experts also join us to explain the different opportunities for business models.

 

The third section is writing your prospectus. The prospectus is a unique document; writing it can be an exhilarating, clarifying, frustrating, terrifying experience. This thorough document outlines the terms of your financial deal and reveals everything material about your business, all while being as compelling as possible.

 

Much of the accelerator process is working with your peers in the cohort. As you write your prospectus, you get peer reviewed as well as have others in our community provide feedback. The end result is a document that anyone can understand and be inspired by. As a combination of your dreams and hard work, your prospectus reveals your personality, your way of looking at the world and how that unique perspective is manifested within your business.

Keep it simple.

The thing we repeat over and over again is that while you will be enamored with whatever it is you’re making—whether it’s baseball bats, ice cream, beer and so on—investors want to know about three things when they talk to you. The first is you. The second is your business—not your product, but your business viability and what value it will create in their community. And third, the terms of the deal—when and how they will get their money back. That’s it. Simple, but a lot harder than it sounds.

 

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