Crowdfunding is democratizing funding for pretty much everything BUT the kitchen sink. The power of crowdfunding lies in its ability to allow anyone to raise money without extensive risk. So who should use crowdfunding? Whether you need to raise funds for an unexpected medical bill, funding your creative work, or starting that dream business, there really isn’t a reason why you shouldn’t crowdfund.
Here’s an interesting note, you’re already crowdfunding, you just don’t know it. When we go out and buy lunch from our favorite sandwich shop we’re conducting a form of crowdfunding. The sandwich shop uses all of the funds from your purchase and everyone else buying sandwiches to operate and provide you with your next sandwich. This is a form of crowdfunding, while it’s not on a crowdfunding platform, the basic tenants of which a business operates relies on crowdfunding. Take another example, when you ask your friends for gas money, you’re conducting a form of crowdfunding, both them and you have now contributed to your next tank of gas. Crowdfunding is so ingrained in our society that we’ve been conducting crowdfunding and not even knowing it for hundreds of years!
You never truly know how a product is going to fit into the market until you start getting feedback. Hopefully from people who love what you’re doing! Wouldn’t it be great if we could tell if an idea is desired before we put countless hours into making it a reality? Crowdfunding lets you do just that, get early feedback from people who genuinely like what you’re dreaming up. It also lets you know if you need to go back and rethink your product. This information is quite valuable to know before starting your adventure and crowdfunding lets you do it before you seal the deal.
Before online crowdfunding, if you needed funding, you’d be in bad shape if things went belly-up but in today’s world crowdfunding helps mitigate this by letting you test the waters. You should always try crowdfunding before you take out a loan or other funding avenues and sign your life away. Most platforms (like ours) do not charge a fee until you hit your funding goal, so if you fail to hit your funding goal on the first go round all you’ve lost is time. Sure you didn’t receive the funding but can you imagine the stress if you had taken out a loan and things went belly-up? You’d have to pay back the loan AND lose time. Ouch.
Nothing is better than seeing someone love what you’ve built. With crowdfunding you don’t just get to experience that, you get to be involved with those people. From the beginning of your crowdfunding career, you will speak to people you would never have normally and build relationships. Even more, these people usually want to be a part of what you’re building and could be looking to get involved with your project. You’ll raise not just funds but a community, full of dedicated fans. You can see how this has impacted Alex from Doppler who talks about the people he’s met along the way right here.
The beauty of crowdfunding is that if you have a niche there is a platform for it. Since the beginning of the digital funding revolution in 2007, numerous platforms offering all types of features have launched. There has been more than one notable project as well. We’ve seen someone raise for a meatloaf recipe, seriously. We’ve also seen people who raise funds to create technology that takes us to the moon at back! The possibilities are endless and you can be one of them, you just have to try it.
Hint: We’ll even help you get everything going for your adventure.
So who should use crowdfunding? Anyone who needs funding. It should be one of the first fundraising opportunities you should pursue, especially if you’re considering a high-risk loan etc. You’ll be given a chance to battle test your idea before you start, build an avid following, and can do all this with very little risk on your part. If you section off a bit of time everyday to crowdfund you can truly raise funds for anything. Just make sure to choose the right type of crowdfunding platform!
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Knowing which type of crowdfunding you want to do should be the first item on your agenda. There are three types of crowdfunding platforms in the industry right now, Donations-Based, Rewards-based, and Equity-based. Each type is tailored to a specific niche of funding.
Generally, Donation-based platforms will let people keep any funds they raise and this would be the ideal type of platform for personal funding. Rewards-based crowdfunding is like pre-ordering a product, platforms within this type of crowdfunding (like ours) allow people to offer rewards to their backers on the condition that they will deliver once they hit their funding goal. This is great for new businesses and creative minds looking to fund their projects. Finally, there is Equity-based and platforms of this type allow businesses to raise funds in exchange for equity shares in the company. This is beneficial when you would like to raise a large sum of funds but are not comfortable with one person holding all the equity shares.