A revolutionary NEW source of funding to sweep across the internet in droves is crowdfunding! According to Growthink.com, $100 million USD was pledged in 2011 on the site www.Kickstarter.comalone, launching over 27,000 projects at a 46% success rate. Now that’s impressive!
When you are starting or growing a small business, it typically comes down to lack of resources to raise that much needed capital! Funding is a very important element to the success of any business remaining relevant in a competitive marketplace. If you’ve applied for a traditional loan; SBA Micro Loan; Unsecured Line of Credit; or even a Credit Card to no avail, then consider the HOT new trend in financing…CROWDFUNDING!
What is Crowdfunding?
Crowdfunding is a cutting edge way of raising the much needed money required by businesses to sustain. A group of investors share their resources to support endeavors initiated by individuals or organizations. Many industries can take advantage of crowdfunding; from political campaigns; service or product based businesses; artist; scientific researchers to software development.
3 Business Preparation Tips for Crowdfunding
- Select the Best Platform: There are many crowdfunding platforms available with new ones forming daily. It is important to choose the one that can best fit your project funding needs.
- Create a ‘WIFM’ Reward Program: Remember that old WIFM (what’s in it for me)? Well, if you want to have a successful campaign, you’d better come up with some juicy reward for prospective investors. The reward you create should be based on the type of campaign you are running. For example, the Crescent Theater was forced to upgrade its equipment and as a part of their reward program, the lowest reward offer is a free movie pass.
- Design a Stellar Marketing Strategy: Consider multiple ways to connect with potential investors. The key is creating a diverse marketing campaign. A favorite by many and Google as well are videos! You can also add a slide presentation, a podcast and a simple written message.
3 ways that Crowdfunding can help you:
Independence from Banking Institutions
Banks are sitting on their cash and aren’t lending to start up or small businesses that need capital. At a recent lecture at George Washington University, Federal Reserve Chairman Ben Bernanke innocuously remarked that lately “small businesses have … found it difficult to get credit.” Most banks have high unreachable expectations along with a daunting process. Indeed crowdfunding offers a more realistic approach to funding.
An opportunity to publicly raise funds for your business idea or existing company to a gazillions of potential investors by way of the internet is astounding! Many entrepreneurs yearn for a chance to receive the type of publicity crowdfunding offers. If well handled, the publicity can greatly catapult your business to immense success.
Validation of your business idea is important. To know that there are people globally who believe in your concept is empowering. People will generally invest in opportunities that are viable. So every contribution you receive from people simply means that they believe in the validity of it!
3 Top Crowdfunding
- Kickstarter: funding platform for creative projects such as films, games, and music to art, design, and technology. Kickstarter is full of ambitious, innovative, and imaginative projects that are brought to life through the direct support of others.
- Indiegogo: an international crowdfunding site where anyone can raise money for film, music, art, charity, small businesses, gaming, theater, and more
- RocketHub: Fundraising platform raises funds and awareness for projects primarily in fashion, music, theatre, writing, and photography.
In conclusion, businesses can gain a lot by embracing the benefits of crowdfunding. It is a very unique way of raising funds for businesses and can greatly impact positively on the success of a startup making them more vibrant and competitive.
About Author: Sylvia Browder is a small business consultant, trainer and author. She is founder of National Association Women on the Rise, a virtual community for aspiring and established women entrepreneurs. For the past 6 years, she has worked as Project Director of the Women's Business Center; and served as an online volunteer SCORE counselor since 2004. For FREE weekly articles go to Sylvia Browder's Blog for Women Entrepreneurs, http://www.sylviabrowder.com.