Crowdfunding : The front-runner to Fund Raising for Start Up’s

 

A great idea for a business and the drive to implement it are two important factors to begin the perfect business, but there is a third thing, “MONEY.” So what do you do?

Crowdfunding is the process of engaging masses of people to invest in ventures or startup’s. Crowdfunding is increasingly becoming a popular solution for startups to raise funds without the hustle of traditional fundraising strategies like bank loans, Venture Capitalists, etc. In recent years, crowdfunding has emerged as the best bet for getting innovative ideas to the frontline. In crowdfunding, you benefit from many investors who can invest reasonable amounts into a business.

However, creating a crowdfunding campaign is not an easy task. It is important to execute an effective crowdfunding marketing strategy properly. It’s important to have a strategic plan in place for your marketing campaign and always try to stick to it. Make it known to investors how you plan to allocate the funds and where their money is going.

Crowdfunding can also be aided through digital platforms through various strategies like content marketing, content creation, audience outreach, social media marketing, etc.

Here are some strategies to follow as you build up your campaign:

 

1. Building Your Audience: As mentioned earlier, the greatest benefit of crowdfunding is the larger investment pool. Regardless of your products, how well you build a community and connect to your target audience is important. You can use a network marketing platform for marketing your products to reach people about your business and its products.

2.   Informative Content: About the Online Marketing part, you should craft your content according to your audience. Develop clear, creative content that caters to the interest of your audience. Provide a clear picture of your products, give updates as necessary, include reviews, testimonials, answer Q&A, FAQ’s, etc. Provide your potential investors with all the reasons why they should do so.

3.  Timing: As you develop marketing strategies, allot a clear period to each task. Always do a rough estimate on different activities such as pre-promotional activities, launch activities, follow-up activities, etc. Build realistic timelines, e.g., organize events reasonably when people can participate and engage in them.

4.   Social Media: Social Media is the most powerful weapon you can use to promote your idea when planning a crowdfunding campaign. Pick the right channels and begin the marketing months before your launch date. Create specific social media pages and hashtag campaigns for your niche.

5.  Right Branding: You should have a clear strategy on how your branding will be done; how your products appear to the audience will impact the fundraising campaign. Your business must look legitimate and professional to your potential investors. Please hire a professional team to do the branding.

 

Crowdfunding platforms usually employ two major variants of the crowdfunding model :

Rewards-Based Crowdfunding: As the name suggests, this crowdfunding model rewards the investors with incentives for the capital provided.

Equity-Based  Crowdfunding: In an Equity-based model, company stock is offered in exchange for the fund.

Marketplace Lending and Donation-Based crowdfunding are also upcoming crowdfunding models.

 

Pro’s

1. Pre-funding: Crowdfunding lays the great groundwork for an innovative project before launch. In a Reward-based business model, you even get money in the form of donations without selling a piece of your company.

2.  Number of Investors: Unlike in traditional fundraising methods, the number of investors is more and this raises more capital and includes more people who have a genuine interest in the business; this will add to the success of your business in the long term.

Con’s

1. Transparency: More number investors mean opening up your business plans and financials to more people, and not all entrepreneurs are comfortable with it.

2. Binary Nature of the process: In this type of fundraising, you must hit the right target because you will spend a lot of time and money in vain if you don’t.

Crowdfunding has emerged as the most valuable method to raise capital for startups. It’s important to choose the right crowdfunding method to raise capital for your business and aggressively implement it to earn the benefits.