How To Generate the Herd Effect

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

In raising funding, the startup founder's job is to motivate the investor to engage in the deal.

Investors are often motivated by what they see other investors do.

This is called the herd effect.

This is when people copy what others are doing.

Here are some key tips on how to create the herd effect with your investors:

For investors who have influence or a network, offer them advisory shares to help recruit more investors.

The advisory shares incentivize the investor to promote the deal to other investors.

Use social media to showcase your investor updates and encourage existing investors to repost and like the mention.

Pitch investors in small groups rather than one-on-one.

Five is an ideal number.

Investors can see the interest from other investors, which generates FOMO.

This also helps build confidence in the investor that they are not alone and will have support from others if they invest.

Finally, calculate the interest and committed funds and share with the investors in regular updates.

This shows investor interest in the deal.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

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