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The Benefits of Crowdfunding

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The Benefits of Crowdfunding

By Startup Valley (560 words)
Posted in Crowdfunding on January 26, 2015

There are (9) comments permalink

We're in a unique time period with the intersection between Internet and business. Twenty years ago, entrepreneurs wouldn't even consider building a website, but it's a foundational step in the 21st century. 

In more recent years, crowdfunding has proven to be one of the best methods of funding a unique idea. A crowdfund campaign raises many small amounts of money from a large number of people. Think of it as a street performer's hat for collecting tips, but in an online setting.

It's a popular way to get your service or product off the ground, and with good reason. Here's why:
 

Minimize startup costs
 

One of the hardest parts about starting a business is the cost of building it from scratch. Many people need to take out a loan or save money for a long time to make their vision a reality. With a crowdfund campaign, all you need to do is prove your idea is worth funding. It's up to you how much it will cost to accomplish that. You may need to develop a prototype or create a video explaining your plan. Compared to starting a physical business, a crowdfunded idea is nurtured from home, meaning you can save thousands on buying resources until your business grows.
 

Test the waters
 

How do you know people will like your product before you officially advertise it? The crowdfunding process makes this step easy. You get to see first if people like your idea, and use the money they donate to pay for the demand. This way, there’s no loss if your product doesn't get off the ground. If you don't reach your goal by your deadline, the money you were given will be refunded to your funders, and your bank account doesn't take a blow.
 

Building a client base
 

It's rewarding to see how many people put money to your cause. Your ego will likely boost knowing that people believe you have a product or service that will benefit them. Every donation represents a future customer ready to buy your product, which can save you money on marketing costs later. Word of mouth can take it from here as people share your idea with friends and family. You can also get connected with others who have similar passions. For example, you may find someone who's also from Los Angeles and supports tech startups. Having many people who back you up is crucial when pitching to investors.
 

Easy publicity and visibility
 

While sharing a new service or product locally and in the real world is helpful, you're limiting your client base without an online presence. The Internet makes it easier to reach large audiences and allows great ideas to spread like wildfire. Crowdfunding websites have built-in options for donors to share your campaign through email and social media. Better yet, news sources also keep an eye on blooming ideas. If you gain enough traction, you may find various stations turning your idea into a story, garnering even more attention. Potential investors also peruse crowdfunding sites frequently. If you have something eye-catching, they could reach out.

If you think you have a beneficial idea, take the first step and get it out there. You won't know how people will like it until you present it to them.

Comments (9)

Melody @crowdfunding posted on: March 26, 2016

What is equity crowdfunding?
This type of crowdfunding allows investors to become shareholders in the venture they are contributing to. These campaigns establish minimum investment amounts in exchange for an equity position. Contributors are required to meet net worth criteria and must be approved by the campaign in order to contribute.
After all both appreciable & informative post it was! Great job by sharing!

Melody posted on: March 26, 2016

What is equity crowdfunding?
This type of crowdfunding allows investors to become shareholders in the venture they are contributing to. These campaigns establish minimum investment amounts in exchange for an equity position. Contributors are required to meet net worth criteria and must be approved by the campaign in order to contribute.
https://myfundnow.com/blog/what-is-crowdfunding
After all both appreciable & informative post it was! Great job by sharing!

CrackTheCrowd posted on: September 20, 2016

A crowdfunding stage like Fundable, you have entry to a large number of licensed financial specialists who can see, associate with, and share your gathering pledges campaign.

Kickstarter posted on: December 23, 2016

Nice blogs.Very usefull information about crowdfunding.Wouldn't it be awesome if you could find what parties were happening around you, right now? Maybe now you can. Invest in this kickstarter to make the party app a reality Visit: http://kck.st/2ghzUEU

suresh posted on: December 30, 2016

https://igg.me/at/ODkXezzpAVQ

suresh posted on: December 30, 2016

https://www.impactguru.com/help-me-to-repay-my-educational-loan

Milica posted on: March 30, 2017

Hey guys, we just launched our crowdfunding campaign after years of development. It's going great, but we wanted to get some feedback from the gurus on how we can make it even better!
We put an enormous amount of work into this and think it's going to be really groundbreaking, so hope you can take a minute to provide some feedback - https://www.indiegogo.com/projects/starsailor-live-brings-the-skies-into-your-bedroom-technology#/

Arnottsimon posted on: April 29, 2017

very apt points you have ,listed in this article. really crowdfunding is the best method of founding, where you can collect a lump sum of money.
Thank for the post, very informative

Dishank Bhatt posted on: June 19, 2017

Nice one. but the benefits are more. but this was nice ones

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