Did you know that crowdfunding brings about $50 000 per hour? It finances social projects, music albums, science innovations, movies, applications, and much more startups.
Undoubtedly, that’s one of the fastest ways to get the support from the whole world. But does your idea worth it? I hope it does, and suggest you a few reasons to launch your first crowdfunding campaign.
Finally, the Word Believed in
In general terms, crowdfunding is a use of the personal financial resources of citizens for the manufacture of any product or solution of social problems. Well, about a dozen years ago this concept transformed to a special support technology that financially promotes exciting ideas and start-ups, particularly in the field of social entrepreneurship (that is, when ideas and intentions are related to the needs of the society).
As a result, modern global crowdfunding market annual turnover is about $ 10 billion. Quite a weighty reason to look closely at the crowdfunding technology and think about how ways to apply it to your business, huh?
No Need to Set the Idea Aside Until “Better Times”
Being an entrepreneur, you always think over, improve, and analyze something. How many great ideas have you put off until better times due to the lack of budget? From now, each and every innovation idea can be brought to life. On the other hand, the unworthy and the poorly presented ideas will be filtered out.
Ability to See the Demand
Obviously, you’re very and very interested in the possible profit of your innovation. As I’ve just said, any crowdfunding platform is a filter! Only the best ideas survive, but even if you haven’t collected enough funds, you can see the demand.
Crowdfunding is much cheaper than any studies and surveys, and the results are probably more accurate. There are no marketing costs in its classical form. Firstly, sponsors are watching the fate of the project, leaving comments and sharing news on social networks. Secondly, the campaign is an excellent newsbreak. Media love both your innovative technology and success in crowdfunding.
Increase in Customer Loyalty
As a rule, the first sponsors of the project are friends and acquaintances. Ask your relatives, friends, and acquaintances to put likes and repost the materials, thereby activating word of mouth. To encourage first sponsors, give them gifts depending on the amount of money invested.
Forming an Expert Status
Master classes, consultations, online and offline presentations, and case studies will strengthen your position in the industry. Proceeding from the fact that your idea is innovative, I can safely say that you’ll be the one and only expert in it, so everyone who’s interested in getting more information will appeal directly to you.
Possibility to Solve Social Problems
More often than not the implementation of commercial projects is combined with a solution of social problems. That means whether you like it or not, you’ll leave a positive image in the eyes of potential customers.
As you see, crowdfunding is a win-win option. But then why not every project reaches the necessary investments?
Well, I believe the reason lies in the mentality. Although in developed countries crowdfunding is already an important component of the economy, people from the Third World countries still reluctantly invest in something that can’t bring an instantaneous return.
Reliability and Stability
Crowdfunding will make the market less centralized. As for now, the banking system, which is based on the success of several organizations, dominates the entire market. This situation can lead to a “too big to fail” state when the largest institutions will ruin the whole market system in case of failure to comply the obligations. A large number of crowdfunding platforms will decentralize the power and establish perfect competition in the investment market.
The Best Assessment of the Economic Indicators
As the rating of the startups is determined by the demand for the implementation of the suggested ideas, the leading platform will be able to give correct values for prices and other monetary aggregates associated with the project.
Currently, financial giants are able to influence the expectations of consumers regarding the development of the market. With a wide crowdfunding and tough competition, such influence will be reduced.
Small and medium-sized businesses often have difficulties with attracting investments from third parties, besides the banking sector. But banks lose their reliability upon the occurrence of economic crises while crowdfunding very slightly reduces the money flow.
No other financing method can provide the benefits of pre-sales, market research, and advertising through sponsors additional costs. Crowdfunding opens the previously unknown ways to reduce the risks of investments. This is the mechanism that gives greater flexibility where other methods are powerless.
As you see, crowdfunding is already an integral part of the global financial market. It greatly contributes to the relation, interaction, and mutually beneficial collaboration between companies and ordinary people. Wikipedia is probably the best example of such cooperation. Despite the fact that the company already had a certain financial stability, hierarchy, and offices, it began to attract funding from the public, expanding the boundaries of its activity. To date, the library has articles in 287 languages.
If you’re going to use crowdfunding as a source of funding, note that:
- You must have high-quality materials and in-depth, grounded plan.
- Social networks play an important role in the success of a business.
- Planning should be detailed and error-free.
You may doubt about launching the campaign, but the world economy doesn’t care. It experiences a large growth of crowdfunding and considers it extremely important.
Author’s Bio: Lucy Adams is an outsourcer from bestessay4u.co.uk. She’s a generalist that has no problem with covering a great diversity of topics. Lucy is an amateur marketer and psychologist. Feel free to share your best ideas and start a mutually beneficial collaboration with her right now!