Billions of dollars of revenue has been generated through crowdfunding thanks to the efforts of the modern entrepreneur. Some innovators are extremely successful with raising funds through crowdfunding. Others have struggled to find any success and have ended up filing for bankruptcy because they couldn’t get the support that they needed. Would you rather be in the successful category? Or would you rather be filing for bankruptcy?
Here’s what you need to know right now in order to successfully raise funds on any crowdfunding platform.
1. You’ve Always Got Options
Crowdfunding doesn’t have to be based on rewards that are given to backers. You can focus your crowdfunding efforts on finding new options to manage your debt, offering equity into your company in exchange for an investment, or ask for donations straight up if you are working a charitable effort. Modern crowdfunding is not a one-size-fits-all type of proposition. Find your niche and find the right platform and you’ll be more successful in the long run.
2. You Need to Know All of the Rules Before You Begin
You have to do more than just list your company or your idea on a crowdfunding website in order to start raising money. Your work on crowdfunding actually begins a long time before your campaign will ever go live. There are regulatory compliance issues that must be followed, disclosure letters that may need to be addressed, and hundreds of portals to research to decide which crowdfunding platform will be the best for your organization. If you have questions, don’t be afraid to ask a lawyer. This is especially true if you decide to pursue equity crowdfunding.
3. You Need to Have a Business Plan in Place
Far too many businesses are approaching crowdfunding in reverse. If their idea is successful, then they put in the effort to create a business plan. That’s not how businesses are successful. Before you ever open the doors of your business, you need to have a plan in place that will guide you through the first five years of your operations at minimum. From a crowdfunding standpoint, you need to know what you will do if you meet your fundraising goals. You also need to know what you will do if you don’t meet your goals. There also needs to be a plan in place that will guide you through the best case scenario where you make millions of dollars. Without any plans, you will be without focus.
4. You Can’t Stop Once You Start
Even if you raise all the money you know in the first 12 hours of your crowdfunding campaign, you can’t shutdown your operations. You need to stay focused on the goals and plans at hand and have transparent communication. Keep building the momentum that you have generated and there is no telling how far you can take your business. If you shut things down, then not only could you lose your progress… but you can lose backer trust too.
If you want to be successful on any crowdfunding platform, you need to take these four steps seriously. Include them with your campaign building tasks and you will be able to taste consistent success.
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