In this video, I delve into the idea of crafting scarcity in fundraising as a mechanism to stimulate urgency and interest among potential investors. I pinpoint three forms of scarcity: supply-related, time-related, and demand-related scarcity.
Supply-related scarcity pertains to the restricted availability of shares, as exemplified by firms like SpaceX. This form of scarcity is cultivated when the company tightly controls its share distribution, which enhances the perceived value of each share.
Time-related scarcity is about deadlines. I highlight the crucial role of using deadlines as a motivation factor for potential investors, stating that those who don’t deploy this strategy are “dead in the water.” The scarcity created by a finite timeframe for investment can be further intensified by applying multiple deadlines, such as those for different investment tranches.
Demand-related scarcity arises when investors perceive high demand for limited investment openings. This can be exhibited through oversubscription, where more investors wish to buy into the company than there are shares available. I share an instance of how this benefited AI Scout, where demonstrating oversubscription led to a “dogpiling effect,” with more investors desiring to get on board.
I also stress the importance of noting name-brand investors leading investment rounds, which enhances the perceived demand and prestige of the opportunity. I direct viewers to my 24-page guide “Calling the Capital” for more strategies on creating a sense of scarcity.
I conclude by emphasizing the significance of maintaining steady communication with potential investors. By keeping them engaged and informed of developments, investors can feel the urgency and competition to get involved, sparking the fear of missing out, or as it’s known on Wall Street, becoming “oversubscribed.”
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For a comprehensive guide, head to CallingTheCapital.com for a free download of “Calling The Capital: 20 Ways to Incorporate Urgency Into Your Capital Raise,” or grab it from Amazon.
Hall T. MartIn: https://www.linkedin.com/in/halltmartin/
Ten Capital Network: https://tencapital.group/