Crowdfunding is becoming a popular way for entrepreneurs to raise money for business growth and expansion. You can test new products and get feedback without giving up equity or taking on debt. Usually, you just give your “investors” a token gift for their contribution.
Before you set up your own crowdfunding campaign, think through these important issues.
How Do You Earn Trust?
If you use a trusted platform, such as Kickstarter or IndieGoGo, you have to win the trust of your donors to gain any traction. Have you created credibility that you’ll succeed in business? Many campaigns simply fail. Some are fraudulent. Investors want to know that your business is worth investing in.
How Do You Stand Out on a Platform?
Kickstarter is a great platform because it gets a lot of traffic, but that means you’ll be competing with hundreds of others for donor’s money. Consider how you’re going to stand out and reach people. If you go with a lesser-known platform, will you get enough traffic to your campaign to make it viable?
How realistic are your goals and timeline?
Are you exaggerating what you can deliver? Your investors want to know that you’re realistically able to achieve what you’ve set out to do. Keep your goals manageable to be successful in crowdfunding.
Do you build interest or campaign first?
Most entrepreneurs want to build the campaign first, without having any interest in their idea. This is backwards. You want to build interest in your idea, then move on to fundraising. Have your ducks in a row before launching your campaign. You should build interest for about five to six months before you raise funds.
What if you fail?
A crowdfunding failure can be devastating to your reputation and ego. You need to be careful when launching a campaign. Know what your plan B is before you begin.
Contact Goldendale Capital to avoid the crowdfunding route. Get financing for your business ideas.