How crowdfunding can help your business
Since the crowdfunding platform Kickstarter launched back in 2009, crowdfunding has changed the way small businesses start-up and grow. Today, we wanted to explore the concept and share how a crowdfunding campaign can help to start-up or grow your business.
So, what is crowdfunding?
Crowdfunding is a fundraising method which allows organisations and individuals to sponsor or fund a business. It's proven to be a great, alternative way of funding a business, with the likes of Oculus, the Virtual Reality headset acquired by Facebook, and Pebble, the first mainstream smartwatch, benefiting from using crowdfunding sites.
If you are thinking about crowdfunding a project for your business, there are a couple of things you have to consider, the first of which is the platform you are going to use. Kickstarter is undoubtedly the most high-profile crowdfunding platform; however, small businesses have also had enormous success using other sites such as Crowdcube, GoFundMe, and Indiegogo.
Assuming that you're ready to launch your new product or business idea, the second thing to think about is the type of rewards you are going to offer your investors. Are you going to run a rewards-based campaign which means you'll be sending your investors a physical product or piece of merchandise? Or, are you going to allow investors the chance to own part of your company in an equity-based campaign?
Finally, you'll want to think about your marketing strategy which is key to any good crowdfunding campaign. The most successful campaigns are not just those with great ideas, but with imaginative PR and marketing concepts too. An easy and cost-effective way to achieve this is to produce a video explaining why you are seeking funding, which you can then accompany with images of your business' products or services. Remember, the more information you deliver, the more credible your business appears, and the more likely you are to attract investment.