6 reasons why you should crowdfund your idea.
There is more to crowdfunding than the money.
Listed below are important reasons why you should consider crowdfunding for your business, startup or charity.
1. Market Validation
Just imagine going to your bank manager with a business plan. In the past neither party had a good idea of whether your idea would take off or not.
Today that has all changed. Testing your product or service on the crowd will give you important feedback. You will know if your idea has any traction in the market. People will support you by investing in one of your rewards. You will have a clear idea after running a crowdfunding campaign how much reaction you received for your concept.
Once you have this feedback you will be surprised how much more funding you will be able to unlock for your business.
I remember four years ago business angels and venture capitalists did not like the idea of crowdfunding. The idea of managing hundreds of investors did not appeal to them. Today they are now sending project creators away asking them to validate their idea by launching a crowdfunding campaign before they look at investing in your idea.
Crowdfunding is a wonderful marketing opportunity in its own right.
Whether you succeed or fail at a crowdfunding campaign you get to raise your brand awareness. It provides a great excuse to reach out to your crowd and share your message.
You will be able to position your story in front of people using the many tools that are out there and get valuable feedback.
Your story is the most important part of your success. You will find that the feedback you get will allow you to refine your story for even more opportunities.
3. Crowd Building
Crowdfunding allows you to build the size of your crowd.
If you started off with a small crowd you will end up with a larger crowd after a campaign.
Some project creators have gone on to run one crowdfunding campaign after another growing their crowd each time. Each campaign can build on the next.
With each crowdfunding campaign you are able to collect a lot of data. This data is invaluable.
Many businesses spend a lot of time and money on collecting leads for their business. By running your own campaign you get to collect a lot of data that you will be able to use in your business and in future campaigns if you run one.
5. Low Risk
Setting up a business or running a charity can be a very expensive exercise using up lots of time and money.
You can now start up or extend your business without having to put up assets that may be placed at risk or give away equity.
Many large companies like Phillips and Sony today test their ideas by going crowdfunding before they go big on production and distribution.
Clearly money is a necessary component in making your project move forward.
By virtue of the fact that your backer got out their credit or debit card and made a purchase will provide the strongest evidence that the idea you have put forward to the crowd has potential for continued growth.
Remember the secret to crowdfunding is in the name. You cannot go crowdfunding if you do not have a crowd. If you do not have a crowd you will need to build one first or borrow one.
Crowdfunding is a marathon and not a sprint but by its very nature it can unlock all these benefits above and lots more.