Crowdfunding is a collective concept of people who pull their resources and money together. This is mostly through the internet in order to support the activities of other people. It is a concept that has greatly assisted entrepreneurs, filmmakers, authors, and musicians to complete projects that could have otherwise fallen by the wayside.
With crowdfunding, an individual can attract a big number of people, who can contribute towards a certain funding target. At the same time, the contributors will retain a small stake in the business that they are contributing towards.
With the current tough economic times, business crowdfunding services have quickly gained popularity, acting as an alternative method of raising funds for a business, ideas, projects, or real estate investments. It has been popularised by online sites such as Wefunder, Crowdfunder, Kickstarter among others.
Ensuring Success in Crowdfunding
One main consideration for utilizing the full benefits of crowdfunding is having a clear understanding of what it entails. This means that the individual looking for business crowdfunding services should have a clear strategy. The starting points should be perfecting the pitch. The pitch should be simple and straightforward. If the pitch fails to connect with the target investors, then crowdfunding is not going to work.
The next thing is making sure that there are enough resources for promoting the pitch daily. As indicated earlier, the process of promoting the pitch should be simple. This is to ensure target investors connect with the idea or project.
Creating and maintaining momentum is another way of ensuring success with crowdfunding. The individual should be very proactive in answering emails, taking calls and using social media to help meet the target investors. It is all about creating buzz around the business, establishing the potential investors, and finding out what they like.
The investors will have several questions about the whole project. Therefore, the individual looking for business crowdfunding services should be prepared to answer the questions clearly and articulately. Investors will want to know how the money will be spent the goals, and objectives. They will also seek to know the exit strategy. Investors will not agree to fund a project that has not followed the due diligence process or lacks trademarks, copyrights and patents.
Benefits of Crowdfunding
One of the best outcomes of crowdfunding is the fact that the business does not have to be located in any specific city or location. On top of that, businesses do not have to be near investor hubs such as Silicon Valley in order to access investors. Using social networks and blogs can establish strong connections with investors from all over the world.
Apart from raising capital quickly, entrepreneurs who succeed in crowdfunding establish strong connections with their backers. Whether it is a short-term campaign or a long-term thing, the individual has already created new potential customers and loyal followers. Crowdfunding will also provide the individual with valuable feedback for the specific project being done.
For the last 6 years, crowdfunding had grown by more than 500%. It is projected to continue growing over the next couple of years. This means the creation of new job opportunities and injection of significant amounts of funding into the economy. This will change the business landscape significantly – it gives them the cash and the clients needed to succeed.