Crowdfunding can give a business a nice amount of revenue, but it often doesn’t cover the costs of ongoing needs. A great campaign brings about a lot of handshakes and hugs, but what happens next? Imagine having the $13 million success of Coolest Cooler when you’re expecting a $150,000 success. How will you ramp up manufacturing without affecting your profits?
This is why the skill of raising money after crowdfunding is such a coveted skill to have. There are two advantages that a successful crowdfunding has going for it right away.
The Product Is Hot.
Your targeted demographics are excited about your product and have proven that they’re willing to back up the hype with some real dollars.
You Can Prove People Like It.
Once the orders have started shipping out, you’ve got an easy way to prove your concept.
The only problem is that many businesses at the start-up level miss out on the first opportunity and find themselves stuck in the purgatory that exists between the close of a campaign and the products shipping out. This is why knowing how to raise money to keep the dollars flowing is so important.
Angels and VCs are the two prime targets to contact when you’ve got these two advantages working for you. On the first option, you’ve got some viral excitement that can translate into investment dollars. On the second option, you’ve got proof of value working for you so that it becomes easier to envision an exit for the backer.
Do Not Ignore The Opportunity To Work With Backers.
They’ll be performing due diligence on you. Make sure that you do the same in return. Backers with experience in your field are key virtual helping hands. Backers who want a paycheck can still be beneficial as well, but they’ll be more interested in your performance than your product. You need to know what to expect from backers just as your angels or VCs need to know what to expect from you.
The key to success here is this: feedback. You must use the positive product feedback to your advantage. Not only can it prove your concept, but it could provide you with the dollars you need after your successful crowdfunding campaign.
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