Finding the funding necessary for new businesses can be a daunting task. Obtaining capital for a venture is one of the biggest challenges that startups have. This is where the practice of crowdfunding can be a huge help to small businesses. Fundable describes crowdfunding this way:
Crowdfunding is a method of raising capital through the collective effort of friends, family, customers, and individual investors. This approach taps into the collective efforts of a large pool of individuals—primarily online via social media and crowdfunding platforms—and leverages their networks for greater reach and exposure.
Crowdfunding is basically a social media platform or outlet that allows you to fundraise the money necessary to build, support or invest in a business, venture or cause. Many very successful business have found the capital they needed to start through crowdfunding sites like the most popular, indiegogo and kickstarter.
But there are many crowdfunding sites that serve different purposes. Some focus on raising money for charity, some for venture capital, some for nonprofits and others for just about any for profit business that you can think of.
Here are 5 of the most popular crowdfunding sites. The descriptions come straight from the sites themselves:
Indiegogo: “Indiegogo is a launchpad for creative and entrepreneurial ideas of every shape and size.”
Kickstarter: Kickstarter helps artists, musicians, filmmakers, designers, and other creators find the resources and support they need to make their ideas a reality. To date, tens of thousands of creative projects — big and small — have come to life with the support of the Kickstarter community.
Rockethub: If you want to be part of an international, pioneering, open community that has helped thousands of artists, scientists, entrepreneurs, and social leaders raise millions of dollars, you want to be part of RocketHub.
Gofundme: “GoFundMe personal online fundraising websites are perfect for individuals, groups & organizations!”
Crowdfunder: Crowdfunder is the leading equity crowdfunding platform, based in Los Angeles, CA.
Not only are there many platforms out there for you to crowdfund on, but knowing the ins and outs of running a successful campaign is just as important. Here are some tips when raising money through a crowdfunding campaign that will help you to meet your desired goals.
Develop your story.
The most successful crowdfunding campaigns are built around stories. People want to know how you turned your idea into a reality and why they should support it. Explaining why you need their support is just as important as the reason you created.
Reach out
You have to become the face of your project. Being its foremost marketer will mean that reaching out and promoting the campaign is a necessity. Don’t assume that someone will just run across your campaign; promote it and try to get it in front of as many people as possible.
Prepare, Prepare, Prepare.
Please don’t assume that creating and running a successful campaign is easy or happens overnight. Successful crowdfunding happens when the creator puts a whole lot ofblood, sweat and tears into its preparation.From networking to product development, a lot is happens before the campaign even launches.
Effective preparation will ensure that when the campaign does launch, it is not struggling for marketing ideas. It has a strong foundation and a trajectory that will more than likely lead it toward success.
Make sure that you interact with supporters.
A successful campaign will always Interact with their audience. This can happen through thank-you emails, social media outreach, status updates and even responses to their inquiries.
Interacting with supporters does not simply happen after support has been given. It happens before the campaign launches as well. Anticipation is built through post updates, sending preliminary emails and announcements and maybe even doing contests and giveaways. The opportunities are endless and can be geared toward any project.When interacting with your backers, always encourage an open dialogue and engagement. Treat your updates and outreach as an opportunity to engage with potential future customers and. The best way to do this is through relationship building.
Let us know if you have any experience with crowdfunding for your business! We would love to hear about it!