Are you planning to grow your start-up company or extend the market reach of already established business, raising money, setting up crowdfunding campaign can help you achieve your goal (not ideal for personal use).
Crowdfunding is a term that you’ve probably heard during the planning stages of your business and Over the past few years, this has become a very popular way for new businesses to get started.
For someone who’s new to crowdfunding online, it’s a way of raising money legitimately from investors or are also called funders.
You set an amount to be raised, the time duration expected to get the funds, describe what business you want to fund and state the yield investors are going to get per unit (share) contributed.
This is made possible by some financial companies (may not really have physical office) who facilitate this kind of funding on the platform created for such business.
They’re responsible to review every crowdfunding campaign before accepting it on their platform and also responsible for getting the interests paid to funders as stated.
Some popular crowdfunding websites that you can use from any where, be it India, UK, US or others are the following and they’re not in any superiority order.
- Funding Circle.
There are several benefits of crowdfunding for both investors and startups and some disadvantages too especially if investors use non-trusted facilitators.
There investments can end up in the air as we’ve heard cases of some GoFundMe examples of interests not being paid and other stories from people who use platforms that don’t have success records of returning principal and interests to investors.
Achieving success in Crowdfunding is not as simple as A B C, there are marketing tips and strategies required and some even outsource consultants to look into their project, get ideas to have the proper planning and executions as investors are always wise and don’t just make donations to grow your ventures.
It involves letting potential funders know about your business plan and convincing them to support you.
There are an unlimited number of online platforms that can help you to reach potential investors to get your business started and your crowdfunding campaign success depends on a few things that you should take into consideration.
Crowdfunding involves asking investors for cash in return for interest, which is known as debt based funding. It may also include equity based funding which is asking for cash in return for a small stake in your company.
There are other forms of crowdfunding as well, but these are the most popularly used crowdfunding models.
You may also run across investors who simply want to be the first to use your product or who want to receive a fixed discount once you have completed production.
This allows you to get the financing that you need and helps to create a buzz among the very audience that you hope will be purchasing your product when it is ready.
Pitching your business idea to large crowds may be overwhelming. Traditionally, you would develop a business plan which is still a good idea.
However, with crowdfunding, you have to really market your company in order to gain investors and it is important to figure out just how you are going to do this.
From experience, you need to also find out what works on each platform, for example, what makes a kickstarter campaign successful may be a little different to Indiegogo, RocketHub, GoFundMe, CircleUp or others and note that they operate similar but not the same account and funding model.
No matter what crowdfunding platform you use, you will have a webpage that allows you to highlight what you can offer your investors. Use this webpage not only to tell people what you and your company are going to do but to show them.
It is an excellent idea to use a video to really get your pitch across to potential investors.
This helps you to focus on the problem that your company and ultimately your product will solve and allows you to provide a more personal insight into your business.
Do some research prior to making your video by looking at other crowdfunding pages and successful companies who’ve completed raising the needed fund even before the due date.
If possible, look over pages that are similar to your own business. See what those business owners have done to impress investors and you can even get an idea of how successful each of those business pitches have been.
Crowdfunding is not as simple as putting your idea out there and getting funding. It takes some work in order to produce a successful crowdfunding campaign.
Think about specific marketing tactics that you can use to draw interest into your company or product.
You will need to select a target audience and then determine the best way to approach your audience with insights that will make them want to invest in your company.
You can learn a lot from visiting other crowdfunding pages to see what marketing tactics other businesses have used. Take your time and plan your campaign carefully. You want your campaign to reach as many investors as possible in the shortest amount of time.