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Tips for Successful Crowdfunding for eCommerce Businesses

Table of Contents

In Short

  • Crowdfunding can help raise finance for your eCommerce business by attracting small investments from the public.
  • Legal compliance, a well-presented pitch, and effective social media use are key to success.
  • Protect your intellectual property and avoid legal issues in your campaign.

Tips for Businesses

To succeed with crowdfunding, ensure you have a solid legal foundation, use social media to promote your pitch, and craft a compelling, visually engaging presentation of your brand to attract investors.

When you run an eCommerce business, there may come a point when you wish to grow your online business, such as by introducing new products for small businesses. Alternatively, you may think about starting a brand new eCommerce platform. Either way, you will need finance to do so. If your existing internet business does not have sufficient funds to assist, you may need to raise finance for your eCommerce brand. One way to gain capital for your internet company is through a successful crowdfunding campaign from potential investors. This article will explain some tips for a successful crowdfunding campaign for eCommerce businesses.

What is Crowdfunding?

Crowdfunding Is a way to raise money for your eCommerce business. However, it is not one of the traditional ways to raise finance for a company such as through:

  • banks;
  • venture capitalists;
  • private equity; or 
  • angel investors.

Instead, crowdfunding for your internet business means raising capital for your company through the public by building a crowdfunding campaign. Each member of the public who invests in your online platform may only invest a small amount, but when many invest, it all adds up. 

You build your crowdfunding campaign through the internet by using a website called a crowdfunding platform, for which you pay a fee. For example, you might choose:

  • Crowdcube;
  • Seedrs; or 
  • Funding Circle.

You can also use social media as part of crowdfunding for your eCommerce brand. 

What Tips are There for Successfully Crowdfunding My eCommerce Business?

If you decide to use crowdfunding for your internet brand, it’s helpful to know some tips on successful crowdfunding. Below, we give you a few.

1. Ensure You Comply With the Law

Naturally, as with any business activity for your eCommerce brand, you must act lawfully and have some legal help when you crowdfund. Therefore, an essential tip is to have an excellent commercial lawyer to help you and check you act legally. 

A solicitor can help your eCommerce brand with your crowdfunding pitch in many ways. For example, they can help you with:

  • drafting robust terms and conditions;
  • understanding and navigating the terms of the crowdfunding process; and
  • complying with intellectual property (IP) law and protecting your internet brand concerning this. 

2. Make Good Use of Social Media

A critical tip for successful crowdfunding for your e-commerce businesses is to ensure that you use social media well while on the crowdfunding platform. Social media can help promote your crowdfunding campaign and attract more internet users to your pitch. You will likely get more members of the public investing in your eCommerce brand.  

However, remember when you use social media to avoid legal issues. For example:

  • ensure you do not post offensive or defamatory comments, such as in response to any negative comments on your crowdfunding campaign;
  • if you use a social media influencer, have a contract between you with robust terms and conditions; and
  • be careful to comply with Intellectual Property (IP) rules when you post on social media.
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3. Sell Your eCommerce Brand Well

When creating a crowdfunding pitch for your internet business, you want to raise as much capital from investors as possible. Therefore, an essential tip for successful crowdfunding is to sell your eCommerce brand well.

You need to give internet users a good reason to invest in your online brand, so you must explain why your offer is valuable or essential.  You should do this concisely to avoid using too many words, as you want to capture their attention.

Remember that you are raising money through the internet, and your crowdfunding pitch can use various mediums rather than just words. You may want to use the following content:

  • pictures such photos;
  • videos of your product or service; and 
  • interviews about it, such as an interview with you as the business owner. 
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 Key Takeaways

If you need to raise finance for your eCommerce brand, you can do so through a crowdfunding campaign. Crowdfunding is where you raise capital through members of the public by promoting yourself on a crowdfunding online platform. You will need to create a crowdfunding pitch on their website. If you choose this method for your eCommerce brand, knowing some tips for successful crowdfunding is helpful. 

For example, it is crucial to have legal representation for your crowdfunding campaign. This means that you comply with the law and have help using the crowdfunding platform. Also, an essential tip is to use social media but be careful not to fall into legal issues when you do so. Finally, it is essential to ensure you sell your eCommerce brand well to attract as many internet users to your brand as possible. 

If you need help understanding tips for successful crowdfunding for eCommerce businesses, our experienced eCommerce lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 0808 196 8584 or visit our membership page.

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Clare Farmer

Clare Farmer

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