Crowdfunding campaigns tend to look like sexy, overnight successes, but rarely are the successful ones so effortless.

What I’m about to say sounds dumb—so dumb that I’m reluctant to have to even say it—but a lot of folks contact me thinking that crowdfunding is easy, and that strangers basically throw money at you via the internet. Folks, if that were the case, I’d be on a tropical island sipping on a Mai Tai, not writing this article.

It doesn’t matter how you plan to raise money—whether via crowdfunding, angel investors, venture capitalists, or even an IPO—money does not rain from the sky. Anyone who tells you otherwise is trying to con you out of money. Raising funds via crowdfunding campaign takes a significant amount of time, resources, and energy. If you’re not willing to invest that kind of effort, you probably don’t want to conduct a crowdfunding campaign (or be an entrepreneur, for that matter).

The point of this article is to give you step-by-step guidance as to how to conduct a successful crowdfunding campaign in a month. If you get nothing else out of this article (or series of articles), there are just a few key points I hope you take away:

You don’t have to be a crowdfunding expert. Leave that to the experts.

Hire experts.

Your campaign will only launch as quickly as you work.

Spend time on marketing. Make sure you tell a good story.

All this is going to take time, money, and effort.

This article assume that you already have an operating business (or a very clear idea of what your business is going to do) and have some sort of coherent business plan (whether its written down or not) or lean startup canvas or pitch deck. Basically, you should already know what you’re doing. If you don’t, you should take a couple steps back and figure all that out first. You should be designing your business around a business concept, not around a regulatory exemption.

Why should I crowdfund?

Highly-sought-after companies don’t have difficulty raising capital. As a result, many quality companies that conduct a crowdfunding campaign are businesses that have made a strategic or philosophical decision to offer their company to consumers or their local community members in order to create brand evangelists. Some of the first successful Reg CF issuers, such as Legion M and Youngry, have explained that building consumer engagement and ownership were key to their overall business missions.

Legion M, a fan-owned movie studio that raised $1 million from over 3,000 investors, sees those backers as a guaranteed audience and evangelists of future releases from the studio. While some issuers might limit the number of investors they allow—usually by taking the commitments with the highest dollar amounts, Legion M’s aim was to take as many investors as possible. As a result, they limited the amount of investment for some larger investors.

Explains Youngry CEO Ash Kumra;

“With Regulation Crowdfunding, you’re now asking your core customers, audience members, users—people who believe in your idea—to fund you. But, instead of just getting some perk or reward, which may become outdated, contributors potentially get an ownership stake in the business. It causes a paradigm shift for the contributor—they begin to think like an owner and will more likely find ways to help the business grow. Case in point—during Youngry’s Regulation Crowdfunding campaign, we did over 20 events. The majority of those events were actually set up by our own backers because they were invested as owners, and wanted to give us opportunities to talk about our company and campaign and, thus, gain more exposure.” (Full disclosure, I am an investor in Youngry, hence my taking the opportunity to mention them in this article).

Simple, Technically Inaccurate Definitions (but they’ll do for the purposes of this article):

First, let’s introduce a few terms that you’ll need to know to understand this article:

Accredited investor: A rich person. Technically, someone worth more than $1M or who makes more than $200,000 a year.

Non-accredited investor or retail investor: Anyone who isn’t an accredited investor, or basically someone who isn’t rich. We call this “the crowd.”

General Solicitation: SEC lingo for advertising (think Google or Facebook ads, or handing out flyers about your offering at a conference)

Issuer: That’s you (the company), the entity trying to raise money.

Offering: Your crowdfunding campaign.

Crowdfunding: Raising capital from a group of people you don’t necessarily know, usually via online.

Week 1: Figure out your strategy.

Basic Questions

How much capital you need? What will you use capital for? These are questions you need to first sit down and figure out. After all, if you don’t know what you’re using the capital for, why would anyone give you money?

How much capital do you need, really?

With first time entrepreneurs, the answer I often hear is “as much as possible.” Well, everyone would like to have more money than less, but every dollar your take has its price, either as more ownership you’re giving away (if equity) or more money you may have to pay back with interest (if debt). (People have written entire articles, probably even books, on this subject. Read here and here and here for more.) So really, how much money do you actually need? There is no standard answer, since some businesses require more money than others to start, and every business is in a different stage of growth. For tech companies, you should estimate your expenses for as long as you think it’ll take to reach your next business “milestone.” For more traditional brick and mortar companies, perhaps you just need enough to start a restaurant or lease the space for a cross-fit gym. If you can’t figure this number out, you probably need to talk to a business advisor.

What will you use capital for?

No investor is going to want to invest in a company that is raising money just because they have a vague notion that they need money. They want to know what that money is going to be used for. Are you planning on hiring 5 new employees in the next 6 months? Are you about to launch a new product and go on a digital marketing blitz? You should be able to write down and justify where all that shiny new money is going.

Choose your (crowdfunding) adventure

Once you figure out those first two questions, it’s time to determine how you’d like to crowdfund. Basically, if you’re asking people to give you money and promising some sort of return on investment, you probably fall under securities laws. Why? Because the SEC said so (more here if you really want to know why).

So, its time to choose you crowdfunding adventure.

The first question is, do you have a pre-existing accredited investor network? You would know if you do. What we’re trying to get at here is whether, without going to the crowd, you’d be able to raise capital using the network of people you already have.

If you do, the next question is whether you need to generally solicit, or advertise, your offering. If you have a network of accredited investors that you’re confident will invest the $100,000 you need, you may not need to use crowdfunding (though you can always do so from a philosophical standpoint). But if you think you wont be able to raise the full amount you need, you may want to advertise your offering to entice new investors that you don’t already know or haven’t worked with previously.

If you don’t, ask yourself whether your investors are more likely to be people from your local community (or state)? Certain types of companies may crowdfund better at a local level as opposed to at the national level—particularly brick and mortar businesses, such as local chains, restaurants, etc. Consider this: a few months ago, I was talking with a guy from Queens, NY about the gentrification of his neighborhood. He remarked that there were certain aspects of it that he appreciated.

“We didn’t have any nice coffee shops or even a Thai restaurant in our community,” he explained. “We had to travel to the next borough just to get Thai. When a Thai restaurant opened up in our neighborhood, I was so happy.”

A Thai restaurant in and of itself is not a novel, groundbreaking business idea, but if the local community sees the need, they may have unique insight as to why the offering is so attractive. That’s not to say that you can’t crowdfund nationally anyway, but it’s always something to consider, especially if most of your marketing dollars will be spent locally and most of your investors are local.

There are also certain cases in which you just don’t need to crowdfund at a national level. For example, one of my favorite regulations is the California permit offering. It allows you to raise unlimited funds from retail investors using general solicitation, so long as all your investors reside in California and the money stays in California.

If you do decide that you’d prefer to raise capital on a national basis, the next question is how much do you need to raise?

If you need raise less than $1M in the next 12 months, you can consider Regulation Crowdfunding. (However, if you need a bit more than $1M, you could technically do a simultaneous Reg CF and Rule 506(c) offering.) If you need to raise between $1-5M, you might consider a Rule 504 offering; and for raises between $5M-50M, you could consider a Reg A+ offering.

Keep in mind that this decision tree is highly simplified. We’re trying to give you an idea of what your strategy should be, and what options are open to you. Next week, we’ll take steps to make sure the strategy you’ve chosen aligns with your goals.

Homework for Week 1:

Decide how much capital you need to raise

Write down exactly what that capital is going to used for

Use the decision tree to better understand the crowdfunding strategy you might employ

Week 2: Reach out to Vendors

No entrepreneur can be the expert at everything. That’s why you hire experts. Depending on what exemption you think you’ll use, you’ll be reaching out to a number of different vendors. I should note that I think its extremely valuable to hire vendors who specialize in crowdfunding, as opposed to generalist accountants or attorneys. Specialists tends to know the rules inside out (and know that the rules actually exist) and will be able to get things done faster, whereas generalists will have to research and learn something they’ve probably never heard of before.

Hire an attorney

I’m obviously partial, but I think it helps to start with an attorney. You should look for one who spends a lot of their time on crowdfunding (otherwise you might get a technology-phobic traditional securities lawyer who doesn’t even know that crowdfunding is legal). Schedule a short consultation. They will likely grill you with many questions, but at the end of it, they should be able to recommend a clear path to action under a specific regulatory exemption, and can refer you to others as necessary.

Hire a funding platform (as necessary)

If the attorney recommended using Reg CF, you will be required to raise funds through a FINRA-approved funding portal. Every funding portal is different—some specialize in debt, others in women-owned businesses or patents, some do due diligence and others merely list every company that comes their way. They also vary in how much they charge, which is typically 4-10% of capital raised, either in cash or securities. And lastly, each platform varies in services that they provide—for example, some offer advertising budgets or services, are able to make strategic introductions, cover certain expenses, or provide template documents to reduce certain costs.

If you are not using Reg CF but are using an exemption with general solicitation (506(c), A+), you can still list your offering on a crowdfunding platform to gain access to their email listserve. Not every crowdfunding platform lists every type of offering.

Hire someone to do your financial statements

If you will be using Reg CF or Reg A+, those regulatory exemptions require an independent accountant or independent auditor to prepare your financial statements. They will, accordingly, ask what exemption you’ll be raising funds under, and how much you’re looking to raise. Depending on your answers to these questions, they must prepare financial statements in different ways. The process could take as little as a few days (for a new company raising little under Reg CF) to a few weeks (if a company that have been operating several longer period of time and requiring a full audit under Reg A+).

Also, ask whether your financial professional is licensed to prepare financial statements in the state where your company is organized.

A quick note: if you’re doing a Reg CF campaign, I’d recommend getting accepted by a FINRA-registered funding portal first. Many portals conduct intense due diligence on issuers and decline over 95% of applications received. If you’re not accepted by any portals, there’s no point in contacting a financial professional.

Understanding Each Regulation

So you’ve talked to an attorney and maybe a funding portal. They’ve told you what regulatory exemption you should be using to raise funds. Now it’s time to understand what that exemption allows you to do, what you’re not allowed to do, the overall process, and estimated costs. Skip down to the section that addresses the exemption you’ll be using.

Title III/Regulation CF

Regulation Crowdfunding (Reg CF) became effective on May 16, 2016 and has raised some $15 million in its first seven months. As of the date of writing, Reg CF allows issuers to raise up to $1 million every 12 months from retail investors, though it contains several restrictions:

All offerings much be conducted through a registered funding portal;

Although general solicitation is allowed, any advertising done off-portal is largely restricted to ‘tombstone advertising’;

Offerings may require reviewed or GAAP-compliant financial statements; and

You will be required to file an annual report.

Investors may be limited in how much they can invest.

Timeline: Very fast. You can begin raising funds very quickly.

Cost: $3000-10,000, excluding funding portal fees and discretionary marketing spend. At the very minimum, you will need an independent accountant or auditor and attorney. Costs will vary as different funding portals offer different ranges of services.

Title II/ Rule 506(c) of Regulation D

Title II of the JOBS Act (also known as Rule 506(c)), became effective on September 23, 2013 and legalized accredited crowdfunding. Before Title II, issuers could not generally solicit their securities offerings, and were required to have a “substantial and pre-existing relationship” with accredited investors. Today, this is known as a Rule 506(b) offering.

With the advent of Rule 506(c), issuers can raise as much as they’d like and can generally solicit investors, but must take “reasonable steps” to verify the accredited status of those investors.

Timeline: Immediate.

Timeline: Fast

Cost: Depends on how much your attorney charges you to draft the PPM and on the complexity of your offering. I’ve seen a range from $15,000 to well in excess of $100,000.

Title IV/Regulation A+

Title IV of the JOBS Act became effective on June 19, 2015, and provided amendments to the old and rarely used Regulation A (sometimes called “Reg A+”), which allows non-accredited investors to participate in a company’s “mini-IPO.” Whereas the old regulation only allowed issuers to raise a maximum of $5 million per year and required a long and grueling process, the amended regulation raises the funding cap to $50 million every 12 months, and has a much more streamlined process.

Features:

Retail investors can invest

You can raise up to $50M

Limitations

Investors are limited to annual investments totaling 10% of the investor’s income or net worth (whichever is more).

Reg A+ contains certain reporting requirements, although at a significantly lower threshold than a public company.

For Tier I offerings (below $20 million), issuers must undergo coordinated review from state regulators (which is painful); Tier II offerings (above $20 million) have more reporting requirements, but issuers need only obtain approval with the SEC, and the states.

Requires SEC qualification

Timeline: 4-6 months

Cost: Attorney fees tend to fall in the range of $50,000-$125,000, though some have reached as much as $500,000. Auditors start at $5,000, and may go up depending on the number of years the company has been operational. Marketing firms recommend a minimum spend of $100,000 or 10% of the total amount of capital you plan to raise.

Week 2 Homework:

Consult an attorney to figure out which regulation you want to crowdfund under

Apply to funding portals (Required for Reg CF, optional for other exemptions)

Engage an accountant/auditor, as necessary

Week 3: Get Organized

By now, you’ve hopefully talked to an attorney (and maybe a funding portal and accountant/auditor if you need to) and have a plan of action on how you’re going to move forward. So, it’s time to get organized.

Two quick things to note before I move on. First, the rest of this article is primarily geared towards those doing Regulation Crowdfunding campaigns. Those doing Regulation A+ campaigns tend will have an extended timeline and the services needed of vendors will be on a much larger scale, whereas those doing a Rule 506(c) campaign, for example, may not need marketing nearly as much if they’re working with a platform that has built a large accredited investor database. Each regulation functions differently, and you should talk to your service provider about what is necessary and appropriate for your particular crowdfunding campaign. Second, the steps below are high level to-dos. Each service provider you engage, for example, will have microtasks for you to complete, though the process varies with each provider. As you begin to work with each provider, they will tell you exactly what they need from you, and what their process is.

Get Legal

Send your attorney all the documents they’ll need to get started. This will include, at a minimum, your formation documents (certification of incorporation or organization), your bylaws or operating agreement, and any document relating to previous financing rounds.

Your attorney will have to prepare offering documents. It could be a Form C (Reg CF), PPM or disclosure documents (Reg D), or Form 1-A (Reg A+). All these document essentially ask you to disclose anything an investors should know.

Your attorney will also prepare the security instrument, or a document that states what the terms of the investment are. One of the most important decisions when undergoing a crowdfunding campaign is choosing the property security instrument and terms. Some popular types of securities are:

Debt Note: Companies that are unlikely to undergo a merger/acquisition or go public, and whose values are are not high multiples of their revenue may want to seriously consider raising debt, instead of some form of equity. The return to investors could be simple interest over a set period of time (i.e. 15% annualized interest over 3 years) or could utilize a revenue-sharing model (10% of revenue over the next 5 years at a 2x cap). Brick and mortar businesses are more likely to raise debt.

Equity: Common stock is usually just ordinary stock with few or no special powers or rights. Oftentimes, in a liquidation event, common stock holders get paid last, after debt holders and preferred stockholders.

Preferred Equity: Preferred stock takes a more senior position in the company’s capital stack over common stock, and usually has more rights attached to it than common stock. For example, preferred stockholders may have more influence or liquidation preference over common stock holders. There may be multiple series of preferred stock, depending on how many rounds of financing the company has undergone.

Convertible Note: A convertible note is often the instrument used by startups during their first fundraising event. It basically treats the investment funds as debt, which converts to equity upon a specific event (usually a subsequent equity funding round over a certain dollar amount).

SAFE: A relatively new instrument invented by Y-Combinator, similar to the convertible note, but with simpler, more company-friendly terms, and design to cut down on transactional cost and time spent in negotiations in early stages of funding. There are now several versions of the SAFE.

Get Your Other Vendors What They Need

Depending on what other vendors you need (some required, others optional under the exemption you decide to use), get your financial professional and funding portal the things they need.

Week 3 Homework:

Choose your security instrument and set the terms of the offering

Do whatever your vendors are telling you to do (and be responsive to get them what they need)

Week 4: Engage a marketing agency

The whole point of crowdfunding is the ability to public tell anyone and everyone about the investment opportunity, so why wouldn’t you take full advantage of that privilege?

Hire a marketing agency

A mentor once instilled in me the mantra that “it takes money to make money.” Why would you spend the time and money on auditors and lawyers to bring a campaign into fruition, only to have the campaign seen by no one? Did you know 90% of Kickstarter campaigns fail to reach their funding goal? This is no accident. Those 90% of campaigns also tend to be the same demographic that doesn’t set aside funds to market their campaign. Successful campaigns tend to hire digital marketing agencies whose sole purpose is to take marketing content and put it in front of folks that are most likely to invest. My point is, if you haven’t figured it out by now, that is most cases, issuers should seriously consider hiring a marketing agency to help promote their campaign. You don’t have to listen to me or my unlearned opinion. Just listen to data.

While there are several digital marketing agencies out there, I’d recommend choosing a digital advertising agency that knows and understand the crowdfunding space, and can understand your business or product. On one hand, its important for the marketing companies to understand the rules and regulations around what they can and cannot say in the advertisements, and what marketing strategies they can and cannot employ given regulatory restrictions. On the other, these agencies have more experience and knowledge of the crowdfunding process, product or business positioning, and sometimes have data, algorithms, or testing methods that help them determine the demographic of people most likely to invest.

Get your marketing assets together

Even more basic than “hire a marketing agency” is “make marketing materials.” That should include:

A company logo

Short company video

Website (for credibility)

Social media (Twitter handle, Facebook page)

Your marketing agency likely will also help you prepare the designs for digital advertisements and draft press releases. You’ll also need to work with them to ensure that those who see digital advertisements are easily funneled to your campaign page (and from there, hopefully your platform has an intuitive, frictionless conversion process).

Prepare to hustle

Encourage your family and friends to invest in your campaign in the first few days after launch. For those uncomfortable with asking family and friends to contribute money, I feel you about the feeling of awkwardness, but why would you ask strangers to believe in you when you’re reluctant to ask those who surround you? And be prepared to take every opportunity to promote your campaign.

Week 4 Homework:

Interview and hire a digital marketing agency

Get your marketing assets together (or if they don’t exist, take steps to create them)

The Rest

Is it possible to get a Regulation Crowdfunding offering up and launched in less than a month? Absolutely. I’ve heard of certain issuers who have gotten everything completed in less than two weeks—although these issuers tend to be super-organized, have basic things (i.e. marketing assets), and have a well-defined plan and goal. It can also take well over a month to get campaigns launched. The timetable, I find, depends entirely on the issuer. Some issuers are super-responsive and can just get it done, while others struggle in getting organized, are reluctant to retain service providers (which pushes out all timelines), and do not commit to the process.

Good luck, and let the races begin.

Amy Wan, Esq.CIPP/US, is a Senior Contributor to Crowdfund Insider. Amy is a Partner at Trowbridge Sidoti LLP (CrowdfundingLawyers.net) where she practices crowdfunding and syndication law. Formerly, she was General Counsel at Patch of Land, a real estate marketplace lending platform. While there, Amy pioneered the industry’s first payment dependent note that is secured pursuant to an indenture trustee and designed to be bankruptcy remote, and advised the company on its Series A funding round. In recognition her work at Patch, she was named as a Finalist for the Corporate Counsel of the Year Award 2015 by LA Business Journal. Amy also brings extensive experience in legal innovation and rethinking the delivery of legal services. She is the founder and co-organized of Legal Hackers LA, and was named one of ten women to watch in legal technology by the American Bar Association Journal in 2014.