Crowdfunding. It’s been a popular buzzword lately. For a new entrepreneur, it can be a great way to raise funds without relying on angel investors or venture capitalists. If you’re thinking about starting a crowdfunding campaign, you better have a full understanding of what crowdfunding is and how to launch an effective campaign. Otherwise, you’ll be wasting your time. You don’t want that, right? Didn’t think so. Let’s get started.
What is Crowdfunding?
Crowdfunding is a process of raising capital by obtaining small donations from a large group of donors. Basically, it’s just convincing a bunch of people to give you money to launch your business. Pretty simple right?
Not really. While the idea is simple, making it work is not. If you don’t want your crowdfunding efforts to crash and burn, you need to use your network. Having the greatest business idea in the world won’t matter if nobody sees it.
You’re going to need to use social media to get the word out about your awesome new venture. If you play your cards right, you can raise enough funds to adequately fund your startup.
There are several different crowdfunding platforms you can use to raise capital for your business. Each site functions a little differently, but the main idea is still the same. You will create a profile that introduces the viewer to your venture (usually through a video), lists the rewards the potential donor can get, and further elaboration.
Using this platform, you will make your appeal to prospective donors. The objective is to convince as many people as possible that your project is worth funding.
Here are a few examples of crowdfunding platforms:
Check out each of these companies to see which one is the best fit for you. If none of these platforms tickle your fancy, you can check out a more comprehensive list here.
Crowdfunding vs Traditional Means
Lack of capital is one of the main reasons businesses fail. It’s no wonder then, that it is one of the biggest struggles entrepreneurs face. Typically, people try to confront this issue by soliciting angel investors, venture capitalists, and other sources of funding.
Gaining funding in this way can be very time consuming. This means you are taking time away from building your business. Crowdfunding actually makes this whole process much easier.
If you’re concerned about raising capital, you should give crowdfunding a try. Seriously. Do it. Don’t be scared. What do you have to lose anyway?
Crowdfunding allows you to reach out to potential donors who are willing to help you fund your startup. Of course, you will have to offer them something in return. You won’t have to give them stock in your company, but you may have to offer them something that is related to your product.
For example, if you are starting an apparel company, your crowdfunding campaign could involve sending each donor a shirt. This provides a great way to gain funding without having to give up control of your company. Pretty cool, right?
Next time we will discuss how to implement a wildly successful crowdfunding campaign so you can become the rock star entrepreneur you were born to be!
Keep Moving Forward.
Leave A Response