Why Crowdfunding Works
Crowdfunding Defined – is a way to raise money, awareness and support for a project, from the people around you. It is a means of funding that allows individuals to make their ideas a reality with the power of the crowd. Crowdfunding enables people with great ideas to raise the money they need, in return for ‘rewards’.
There are a variety of sites where you can post your business, project, invention, book or idea with the aim of raising money. Kickstarter, for example, is one of the more popular ones.
In simple terms, you ask for donations of as little as $10 and up to $1000’s depending on your requirements. For this donation, you then provide rewards to the donors. These rewards are anything from free products to the ability to be involved in the idea or project itself.
The project has a required amount they need and if that amount is raised then the project received the money. If the required amount is not reached then no money is donated or received.
The kicker is that you need a great pitch, idea and fan base for it to work well. It is this fan base who help to then grow and promote your project ongoing.
To get started
- Have friends or family whoa re already interested in donating to your project
- Make sure these people will also promote the campaign to their extended networks
- Ensure the rewards for donations are worthwhile
- Be serious about your plan and your skill level to get things going
- Have a great video as part of your pitch
- Make sure you PROMOTE your project everywhere, all day, every day
- Let potential investors know within your pitch what you have contributed to the project.
When it works
- Crowdfunding has raised capital for many wonderful projects.
- An amazing project and pitch will often easily reach and then pass the expected amount.
- You have a ready to go base of raving fans
When it doesn’t
- Your project may not get off the ground
- Perhaps your story just wasn’t engaging enough to get off the ground
- You may have wasted a substantial amount of time
- The target may get reaches but you may have underestimated the amount of capital you actually required.
Have a plan
- Have a plan for your project, even if it is not a business, create yourself a plan
- Test the idea with your friends and family
- Have a marketing plan, don’t just rely on the crowdfunding site as promotion for your project
- Do your research before you try
Crowdfunding has got may projects, businesses, inventions, ideas, products, authors, musicians and more the money they need to get going. It may just be the perfect thing for your idea or project to get up and running.
Have you ever tried crowdfunding?
Were you successful and if not do you know why you were not successful?