The world of crowdfunding is bustling – lots of product launches and campaigns are reaching their funding targets sooner than anticipated. So if you intend to launch a business venture and you’d like to give crowdfunding a try, here are some pointers.
As its name suggests, crowdfunding is when a large number of people contribute a relatively small sum to fund a business venture.
A big plus is that it gives you more than just funding – you also attract customers and supporters who will back you in the mid and long term. A successful crowdfunding campaign will have positive repercussions later on if you seek further investment.
On the downside, crowdfunding is not fast and easy money. The process of researching, testing, planning and running your campaign can – and should – take a few months.
It’s important to keep both elements of crowdfunding in mind: crowd and funding. Most people focus on the funding element, but your crowd is important – they become your community and their loyalty is precious. At first, it will probably be your friends and family pledging funds, but as these numbers grow, other investors will start to notice and begin pledging too.
The three types of crowdfunding
Donations-based funding