Crowdfunding is a modern form of raising money from a large group of people to put forward a plan and executing it further. Campaigns are held with awareness caused through the internet or postal subscriptions where an initiator takes up the charges and expands the plan of the main reason for crowdfunding. People contribute decent amounts to result in a huge some that is culminated in a business venture. It has three major elements that make it successful:
A person who has the initial project planning.
A significant group of people who are part of the monetary funding.
A medium through which the money is raised.
There are several ways of crowd funding techniques that are promoted through campaigns. The internet is one of the fastest and widest ranges of spreading it with the help of social networking websites. Also, there can be live interactions with people upon arranging for an open conference where the audiences can be advised and given a detailed knowledge of the projects they going to contribute to. Various startups have been created with the help of crowd funding. Several music videos and featured short films are also results of crowd funding be it from fans or faithful followers.
Social media as a massive platform
The introduction of social media has made it a very stable and dependable platform. Millions can be reached in seconds to make the idea viral and receive positive response. A marketing tool needs to get strategized and the target audience should also be scrutinized before the campaign begins. One the idea is appreciated it gets to the easy end of the business with the resources pouring in. Internet has been dominating almost every field, for example if you’re looking for a good pest control service then you can easily try out the service of elkhartexterminators.com.
A well structured plan is what every donating person would like to invoke their money into. The massive crowd would any day deter a half aimed plan and push aside the whole intentions of crowd funding it.
A video clipping
A well made and edited video added with the adequate information can just be the right thing to develop a smart crowd funding maneuver. A perfectly crafted video added with the right resources and elements will surely engage the attention of the masses and convince them in the idea. The simple idea is to make the targeted audience aware of the forthcoming engagements and ensure their financial support in it.
A media page
Getting attached to a media page will bring closer the gift of the media. As always seen in the past, the power of the media can make or break and given situation. The help of the media uplifts the worth of the initiating idea if all the information and projections look solid. One is advised to create a filled web page with pictures to make to make the idea look more vivid.
It is always a valuable trait to stay connected to the supporters. This shows the worth that every individual in the campaign has boosting the morale and making them feel needed from stage 1.
For every 1 million startup ideas that are envisioned by budding entrepreneurs, only a handful get to see the light at the end of the tunnel. This is so because only a fistful of potential businessmen are successful in convincing venture capitalists, angel investors, and financial institutions about the viability of their startups and receiving funds. Your possibilities of receiving finance for your business that you’re yet to launch will surely go up if you exploit crowdfunding sources. Following are some tips on you how you can brighten your chances of receiving funds via this route.
Pick The Right Platform
Choosing the right platform that’ll connect you with the maximum number of individuals or institutions who’ll be willing to give second thought to your project is the first and the most important step. Two of the best crowdfunding sites are Kickstarter.com and Fundable.
Decide on How You Wish to Repay Investors
There are three fundamental ways of liaising with individuals that keep on surfing on the different automated social networking sites. One thing you should keep in mind is that crowdfunding happens exclusively online enabling you to publicize your project across infinite sites and web-based platforms.
You can opt for debt-based funding where lenders advance you a sum against a specified rate of interest or you can opt for equity-based funding where lenders would be interested to have an ownership stake in your business. There is also a third option where you pledge to payback in kind (instead of cash) like offering a t-shirt, mentioning the name of the lender in your site.
Make Lenders See their Benefits
If you want to expedite the process of pitching for funds from prospective investors, you’ll have to forget thinking about your benefits for a while. Rather you should focus on what you can offer to investors. Perhaps the best way to realize that is to put yourself in the shoes of the investors.
Getting your startup off the ground in today’s dog-eat-dog commercial landscape requires you to think out of the box and exploit your creativity optimally in order to garner the funds-lifeblood for your business. Not only will you have to tap as many sources as possible but also hardsell yourself which means preparing highly organized business project, and the ability to convince potential investors about the viability of your startup. Following are some of the tried and tested ways of attracting funds for your venture.
Taking this route would be your best bet for jumpstarting your business. By bootstrapping you’ll at least be able to get started and keep the business going for such time till you win the trust of institutional investors and venture capitalists as they’ll be in a position to lend larger lump-sums. For self-starting you can use up your savings, keeping working at your job, solicit money from parents, and go for some credit cards with zero interest rates.
Near & Dear Ones
Borrowing from your relatives, friends, office colleagues, and your parents has always been a sound means of pooling funds. And this method has also been tapped to the hilt by a majority of eager entrepreneurs. Your family, friends, and relatives are always the most reliable group of people who’re most likely to believe in the potentiality of your venture. However, the biggest flipside of borrowing via this route is that you’ll be at risk of assassinating relationships that you treasure the most in case you fail to repay.
If you care to explore a little diligently, there are lenient investors and small companies that are willing to fund smalltime businesses in return for a mutually agreed interest rate.
Equity financing can go a long way in helping you to inject generous doses of capital in your startup but it comes at a huge cost. You should be mentally prepared to offer a stake in your business, and the larger the equity provided, the higher the stake.
Sourcing funds from institutions with deep pockets and wealthy individuals had always been an issue, especially for smalltime yet innovative entrepreneurs who didn’t even have the resources to make a prototype that’d convince the angel investors to furnish funds. The advent of the internet has somehow eased matters for these hapless entrepreneurs who’ve tapped the various popular automated social media networks to garner financial resources for jumpstarting their stalled projects. This approach where you cast your net wider for soliciting funds is known as crowdfunding.
Going by the crowdfunding method, you showcase your project to a larger group of people or potential investors, and some of these prospective candidates could be individuals you’re acquainted with. The most noteworthy and striking aspect of crowdfunding is that the canvassing or promoting is done solely through the internet. The chances or probabilities of your being able to obtain the requisite funds are better compared to the traditional method where you’ve to struggle a lot before you see a ray of hope.
There are certain distinct advantages that crowdfunding has over the conventional approaches. Firstly, and most significantly, your reach is extensive and across-the-board as you’re able to contact nearly innumerable net surfers and users. Popular crowdfunding sites like ‘Kickstarter’ and ‘Fundable’ connect you with millions of netizens, some of them who might turn out to your future investors. A convenient campaign prepared for this route of attracting funds provides you the opportunity of going through your project all over again and fine-tune it accordingly.
You can publicize your campaign very quickly and across different social media networks at minimal costs. This not only increases visibility which ultimately expedites the process of crowdfunding. There are three basic ways in which you can request for funds via the crowdfunding route-reward or donation, debt funding and equity funding. As per the first approach, you the innovator pledge a non-monetary reward or donation in exchange for the funds you receive. According to debt-funding method, investors advance you a lump-sum against your promise of repaying by paying interest on the sum. Equity funding happens when prospective investors are offered an equity or stake in the company that you’re about to establish in lieu of funds.