Investor Updates – Why They are Important in Equity Crowdfunding and What You’re Required to Report
Starting a business is hard, and as the founder of a new company, you may feel like Sisyphus at the bottom of a steep hill. Once you’ve started an equity crowdfunding campaign and established a presence in the community and online, it’s time to report on the status of that boulder on the hillside.
Investor updates are crucial to the well-being of both your equity crowdfunding campaign and company as a whole. Establishing positive, trust-worthy relationships with your investors is the best way to ensure they stay engaged and active in your venture. If you’re trying to receive additional backing, investor updates are a useful tool in converting fans and followers to investors.
The format of your investment update is up to you. A simple blurb with bullet-points can get the job done - visuals including graphs and charts can also be effective in illustrating patterns and trends. Think of it as a personal newsletter - a way to keep in touch with your community. Aim to post 2-4 updates per month during your live campaign. You may consider posting an update when:
· A goal is reached – investors and fans will revel in all of your wins! If the goal aligns with a benchmark in your raise campaign, emphasize it. Consider including pending milestones so your audience knows what you’re currently striving toward.
· You’ve launched a Product/Service/Version Update – highlight new products or services that have launched since your last update. Have you made improvements to existing products? Released an exciting update? Share them!
· Somebody joins your team – give a shout out to new employees that have joined your business. Share their expertise and how they’re moving the company forward.
· Your industry is in the media – what’s going on in the world that is affecting your business/industry? How are you adapting and responding to the changes?
· You’re speaking – is a member of your team speaking at an upcoming event or appearing on/hosting a webinar? Let your investors and fans know so they can have the opportunity to participate and further connect with your business.
· Positive press is released – share any press, video clips or blog posts involving your business. Think of new and consistent ways to push your campaign into the spotlight – no news sometimes means less eyes.
Updating investors during your crowdfunding campaign is just the beginning – you’ll want to continue the updates throughout the longevity of your business as you get trek closer to the top of that mountain! Additionally, when it comes to equity crowdfunding, the law requires businesses to file an annual report to update the SEC and investors. The report is due no later than 120 days after the end of the fiscal year. Failing to file will prohibit you from being able to raise future funds through equity crowdfunding. More information on specific requirements can be found here.