I’m creating a web/app startup. We are at least several months away from a launch, even from alpha testing. Some people (private, mostly probably not big money) have reached out to me interested in investing. I’m thinking about using a crowdfunding platform.
I’d like to know:
- What’s people’s general take on crowdfunding platforms, which are recommended, etc.
- How secretive should we be at this stage? We are in the process of building our pitch deck, which will have actual screens from our designer for the future app. I’ve been hesitant about being too explicit (outside of friends and family) about the specific novelty of our product, but maybe it’s best if I lay it all on the table in the crowdfunding platform and just be explicit as possible, including releasing the screens?
- We are not yet incorporated yet, but we’d like to in a month or so. Is there any sense in doing crowdfunding that goes to a private bank account before incorporation, or should we just wait until we incorporate?
Thanks!
I agree with the first comment about not crowdfunding. I strongly suggest going for angels, VCs, etc. l could share tons of crowdfunding horror stories from founders I know. It’s take up pages.
It’s not too difficult to create a pitch deck, cap raise process, shareholder agreement, etc. I’m confused though. Are you wanting donations or are you raising capital via equity? Very different scenarios. Crowdfunding is donations with very little, to no, expectations. Raising capital via equity means you’ll have a roadmap, use of funds, growth strategy, etc.
Regarding secrecy. If you’re concerned, there’s another reason to raise a seed round from friends and family - it’s really not too hard. Also, just be aware you will need to actually disclose your product and plans in a pitch deck. Additionally, most prospective investors won’t sign an nda, unless it’s fairly light. That typically gets tackled later on. So, avoid sharing trade secrets but don’t hesitate about showing financials, the mvp, etc. to them. Too many founders get caught up in secrecy when in reality, investors don’t care at the early stage. Obviously, there are expectations to this, they’re just rare.
Good luck!
I do bith IT and also co-own two restaurants. Tge latter was great fir crowdfunding, mostly because it came from existing customers. Never seen web and tech work effectively with crowdfunding. But here’s the real question: do you really need funding? Or is this just bc people showed interest?
Do you have customers yet? Letters of Intent?
If you are so deep into secrecy forget about angels and VCs because it is not looking professional at all. Raise some love money (family and friends), but like it is said on the first comment : SaaS does not get much success with retail investors.
You’re several months away from launch? You should probably be building an MVP first as quickly as possible and getting it in the hands of others. Have you read The Lean Startup?
No, thanks for the book rec!
Crowdfunding is pretty good for awareness. I’ve seen many raises crowdfund pre-ipo and that round did wonders on the awareness side and ultimately helped them in the first few months of trading.