Earning money through crowdfunding for your future business might be one of the best funding options in today’s world. Crowdfunding usually takes place on different platforms that have been helping people make their dreams come true for years. According to a few sources, in 2015 entrepreneurs were able to raise almost $35 billion with the help of these types of websites, while in the latest years this amount has reached new heights.
These are some of the most popular crowdfunding platforms that any entrepreneur with high aspiration can try:
It is one of the most popular crowdfunding platforms out there, while actually being the oldest to be around. Launched in 2009, statistics show that up until April 2018, there have been 397,598 projects funded through Kickstarter.
Almost 200 companies have hit their funding target using WeFunder. There have been 67,386 investments and 7 companies were even able to raise over $1 Million.
“I felt a kinship with Wefunder... allowing people to invest in the things they believe in, have a passion for, or an emotional connection... that's what we're about also.” Ed Damiano, CEO of Beta Bionics
Raising money for over 30,000 campaigns, Indiegogo is a platform that has helped people make their dreams come true in almost 200 countries.
Helping entrepreneurs all across the United States raise seed funding, SeedInvest currently has 223,901 users and over 220 launched companies. The average investment per company is $500,000 and the largest so far reaches $2,000,000. “In June 2015, SeedInvest was the first equity crowdfunding platform to open up to the other 98% of Americans who were previously restricted from investing in startups.”
A platform that connects investors to entrepreneurs, Crowdfunder helps businesses across the United States to form, grow and properly develop.
Although everything may seem fine and dandy according to what you have read so far, not every campaign that is meant to gather funds through these platforms ends up being successful. In fact, most of them fail to raise what they ask for. Even projects that seem to be very well organized and thoroughly planned can fail.
But this is certainly no reason to feel discouraged. By following a few key steps you can avoid an unhappy fate and be successful. An interesting fact is that even entrepreneurs that already own a business sometimes turn to crowdfunding in order to save their business. To give you a better idea about the essential steps that a campaign requires, we have selected some of the most important things that you should consider before you start.
1. Do as much research as you can
Doing thorough research before you even start your crowdfunding campaign is essential. You need to know everything there is to know about how crowdfunding works, how other successful campaign succeeded and consider all the strategies that might work for you. There are quite a few regulations you should be familiar with before you begin. Each platform has different rules, so make sure you don’t miss anything.
2. Pick the right platform for you
In the last years, there have been a lot of crowdfunding platforms that have invaded the market. It is a very popular thing nowadays so you should try to know as much as possible about these websites before you choose the right one for your type of business. According to your niche or industry, you should target a few and see which fits you the best. You need to make sure that you can easily reach your target market and potential investors using that specific website.
3. Set a funding objective
Considering that you might be launching your campaign on Kickstarter, you must know that if you don’t reach your funding objective you won’t be getting anything in the end. It is highly important - especially if you use platforms similar to this – to have the right sum of money in mind. If you manage to meet or even exceed your goal, then, of course, you get the money.
Other platforms like Indiegogo give you the funding regardless of whether you reach your objective or not.
It is important that you acknowledge the fact that you will not be able to change your funding objective after initiating your crowdfunding campaign.
4. Know your target crowd
In order to be able to properly market, advertise and spread the word about your crowdfunding campaign, you need to do tons of research about your target audience. Consider everything your audience wants and even different circumstances.
Researching and collecting valuable data takes a bit of time, so make sure that before you launch your campaign you get all this covered. Besides gaining a lot more confidence, it is will much easier to start out your campaign.
After you know who to target and more specifically what these individuals are looking for, you can finally start advertising and marketing your business. Try to ditch traditional advertising – like TV and radio – and use the power of the internet. Online marketing is cheaper, more effective and efficient. Keep in mind that using materials that truly fit with your project is definitely the best choice.
6. Offer something to your investors
Providing your investor with anything, even something solely symbolic may help your campaign go better. It could motivate people to invest and this way they will be able to have a more tangible relationship with you.
7. Get through to your investors
Always try to add a sincere personal touch to the message to your future potential investors. Anyone interested in your business idea will trust you most easily if you try to make them understand your goals better. It is much more likely that your campaign will be successful if you open up in the right way. A certain level of transparency is always recommended when you try to sell something.
By sharing your story in the right way you’ll be able to get through to your investors more easily while you will also be able to let them know how your product or business idea can benefit them.
8. Request and accept any kind of feedback
Although it can be tough to hear, feedback is very important to our evolution and development. In fact, the more feedback you get, the more chances you will have to improve your business’s model. So even before you will be able to start your company you’ll get the opportunity to improve certain aspects that are important for your target audience.