If you’re new to EquityNet, or just not familiar with our popularity ranking, it’s essentially a five star rating system that’s designed to act as a gauge of investor interest in the businesses listed on the site. Since we launched it a few months ago, we’ve responded to a number of calls, emails, and even a few letters from entrepreneurs who want to know how it works, and what they can do to make theirs better. Today, we’re going to go over three of the most common questions those entrepreneurs have asked and explain exactly how it works.
What’s the point of ranking businesses by popularity?
The purpose of the popularity ranking system is two-fold. First, it acts as one of many filtering tools for our investors to navigate one of the largest private capital marketplaces in North America. Second, it lets anyone who visits the platform see what businesses investors are actually looking at and responding to.
What criteria affect popularity?
Since the system’s launch, we’ve constantly worked to perfect its accuracy and value. To that end, we’ve settled on three, equally weighted criteria to determine business popularity:
• Profile Views – a sound indicator of early interest in a company. Entrepreneurs often utilize social media tools (Twitter, Facebook, LinkedIn, etc.) to share their profiles, drive traffic, and start conversations. We usually recommend that entrepreneurs start with their immediate networks by using our Crowdcast to share their profiles.
• Document Views – typically indicates more interest in a company. Usually investors view documents if their interest has been peaked to learn more. Having a business plan, media, and other resources is essential to help investors determine if a company is a good fit for them.
• Message Response Rate – shows that investors have serious interest in a company and are beginning the due diligence process. Best practices show that well researched and individualized messages to investors generate more interest than generic messages. We track how many messages a company receives in response, as a percentage of how many it sends.
Initially, a company’s response rate tends to be low as it starts to cast a broad net. But as companies narrow into further diligence with interested parties, the response rate becomes much higher. We always encourage entrepreneurs to keep communications high quality, to update interested investors periodically, and to build a genuine relationship.
Why has my company’s popularity fallen?
This is probably the question we get the most. In short, the system is updated daily and designed with a decay factor to keep rankings fresh and allow newer companies to rise to the top. Basically, the value of a company’s metrics diminish slightly every day – you see decay rankings like this all over the web – Facebook’s EdgeRank and Amazon’s book ranking systems are prime examples. The end goal is to make today’s metrics more valuable than yesterday’s.
Ultimately, our goal here at EquityNet is to provide entrepreneurs with tools to help them achieve funding success and give investors an easier way to find and invest in quality deals. The crowdfunding landscape is constantly changing, but our commitment to providing outstanding service to investors and entrepreneurial communities across the nation has not. If you ever have a suggestion about the popularity rating or anything else, feel free to drop us a line.