With nearly 200 crowdfunding platforms providing opportunities to entrepreneurs and backers alike in the United States alone, this funding option is becoming a very viable way for capital to be raised in an efficient manner. The amount of money coming through these platforms is incredible, with nearly $3 billion raised in 2012. With banks holding a tight leash on money, which ultimately holds back business development, you need to start crowdfunding right now to get your ideas known.
Here are 5 reasons why you should be getting involved if you haven’t already.
1. Crowdfunding is Convenient
It’s not always easy to ask someone for money. It can be really hard when you do this in person. Then there’s all that loan paperwork, the legal documentation that needs to be signed, and the repayment plan that must be figured into your budget. With crowdfunding, all of that goes away. You get the cash you need upfront if you meet your fundraising goals. Some sites allow you to get whatever cash you raise, even if your goal isn’t raised. This way you can get to work right away doing what you’re best at instead of having to sign contracts all day.
2. Crowdfunding Provides Instant Validation
To determine if your idea is a good one, the traditional method of marketing says that you’ve got to test your target demographic. You’d take surveys, give them demo products to use, and then convince them that your idea can solve their problems better than anything else on the market. With crowdfunding, you get instant validation. If people think your idea is a good one, then you’ll be funded. If you don’t get the funding, then you know it’s time to go back to the drawing board.
3. Crowdfunding Reduces Risks To Everyone
When trying to secure capital, it is very common for a backer to require a certain percentage of the business. They do this to make sure they get the best chance to make their money back at the very least. With crowdfunding, your idea gets funded by providing people with instant rewards. Sometimes that reward is a simple “thank you” for contributing. There’s no risk of giving up a percentage of the business and backers can get a product or service they want while you make money. Talk about a win/win.
4. Crowdfunding Gives You Immediate Feedback
Although your idea might be good, there might be an backer out there that can make your idea great. Crowdfunding also allows for backers to give you instant feedback about what your offer happens to be. In return, you get the chance to interact with potential customers and that begins the development of the all-important relationship. It’s a chance to establish a community of people who are all centered around the goal of making your idea become a reality.
5. Crowdfunding Is Easy Marketing
Sharing a crowdfunding idea is a natural phenomenon on social media. It’s easy to do and it can raise a lot of cash fast. You also get email marketing access and when you combine this with the free PR, it means that you can spread more awareness of your brands and concepts.
Are you ready to get involved with crowdfunding? Take some time to see how it could work for your business and then get started today.