I went to an event on Wednesday night that was all about Crowd Funding. I had no idea what to expect, the information provided was fantastic so I had to share it with you. I have to say I learnt so much on that evening and I believe that it can be a great way for any business to raise funds to grow their business outside of the traditional financial systems.
By definition crowd funding is the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.
There are various well known and reliable platforms for crowdfunding including Posable, Indigogo, Kickstarter and Krowdster
The model works by the platform bringing together two parties. The initiator who proposes the project and the individual or group who supports the idea.
Project creators create a profile which will usually contains a video and a short introduction about their project. The main idea is to create a compelling message that other likeminded individuals will be drawn towards. Videos should be brief and to the point. They should be no longer than three minutes long with a clear call to action.
Once the project is launched each day is counted down and money raised is tallied on display for visitors to follow the success of the project.
Typically twenty five to forty percent of revenue raised is from the initiators first, second and third degree connections which usually consists of family, friends and work colleagues. Once a projects gains some traction other people start to contribute to the campaign. It is an investment of time. For the duration of the campaign, it will require some one working on it full time. It is paramount that you follow through on your promises of rewards. Not doing this is a fast-track to losing credibility.
Social media is a great way to spread the word about your campaign. Generally speaking the main reason why people unknown to you will connect to your campaign is that they connect to the purpose or some physical aspect of rewards offered, they may also connect to the creative display of your campaign.
Crowdfunding is not just about start-ups in can be used by larger business who wish to expand their product range or services etc… It is also a great asset for sourcing potential new clients as the awareness of your business is increased making it also a great way of testing the market.
Remember this is not a hand out you will need to prove yourself and demonstrate the success of your project as you go.
Crowdfunding is a great asset to businesses of all sizes it can not only help increase your revenue but it can also increase your client base. Good luck!