In previous posts we’ve covered the questions you need to answer to determine if your business how likely it is that your business will get Crowdfunding.
Then we reviewed the decisions you need to make before your put your proposal on the CF site.
In today’s blog post we’ll review the rewards or payoff you can receive for all your hard work.
Crowdfunding can give you:
- Promotion, exposure, word-of-mouth. Your company and product/service/invention is promoted on a CF website that will bring in lots of traffic (hopefully) and social media contacts.
- Relatively low-cost funding. Compared to other forms of financing, crowdfunding is cheap. If you reach your funding goal, you typically pay 4% of the total raised to the CF site. If you don’t reach your goal, with flexible funding (and this is not available on all CF sites) you pay 9% of what you raised – and you get to keep the rest of the money.
- Money you didn’t have before. As I said above, with flexible funding, even if you wanted say $5,ooo and only raised $2,500 at least you get to keep that, minus the fee. This is money that you didn’t have before.
- New customers, clients. The exposure you get on the CF site gets you clients and customers that you wouldn’t otherwise have.
- Proof of concept. If you had lots of backer (contributors), you can say in your marketing or to future funders that there was interest in your product, that the concept was proven.
- Future funding. If you reach your funding goal, your business is much more likely to attract future funders. You can now boast that your company/project was “100% backed” in crowdfunding.
All of the above is not out of the realm of possibility. Many businesses have been successful using crowdfunding, but it takes commitment and a lot of work as I’ve outlined in previous blogs.
In my next crowdfunding blog I’ll highlight a company that had extreme success in crowdfunding. Then we’ll look at some that didn’t and discuss why.
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