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Two-Stage Funding and How It Benefits Crowdfunding

Two-Stage Explained


 

Looking at the industry, the current funding models fail to do projects justice and often act to hinder project creators. That’s why we engineered a crowdfunding friendly funding method to give project creators funding freedom while furthering funding potential. We’ve accomplished this with Two-Stage funding.

Two-Stage funding is a new way for projects to receive funding within the crowdfunding sphere. Instead of providing just a single funding period, Two-Stage funding provides two funding periods back to back. These two funding periods are engineered to maximize funding potential.


How do the stages differ?

Both stages have similarities and differences. Similarities are they have specified funding goals and duration. The stages behave differently. Stage one is “All-or-Nothing” funding while stage two is “All-Supportive.” Essentially, you keep funds you raise in stage two.

 

You must be successfully funded to migrate to stage 2. Specifically, you must achieve your goal in stage one to unlock stage 2 funding. The reason this is important is that supportive funding has a poor turn out as a stand-alone model. Because of sponsor risk in backing a project with supportive funding, there is no guarantee that the sponsor will get the product for their cash. When you place a supportive model after an “All-or-nothing” model with the stipulation above, you negate this risk.


So then if there are two funding models, how are payments processed?

At the end of each stage, payments are processed. After you’re successful in stage one, you don’t have to wait until the end of stage two to get working. We handle all donations from stage one at the end of stage one and all donations from stage two at the end of stage two.


Interesting, so how should I leverage the stages?

We allow you to use each stage to fit your project planning, enabling you to define each stage’s goals without limitations. However, stage one and stage two are engineered with specific usage in mind. Stage one is meant to be used for short-term (15 – 45 days)  viable product (MVP) funding, while stage two is meant for long term (45 – 120 days) stretch goal funding. You want to raise enough in stage one to be able to deliver your project to the world, much like other platforms. Stage two should be utilized to capitalize on the success of stage one by pushing for more donations and showing progress using stage one funds. Most of the time crowdfunding is just the beginning of the journey, yet most projects fade from the spotlight once off the platform. Stage two enables you to stay in the spotlight while pushing for more funding.


Two-Stage funding final thoughts

As you can see, Two-stage funding unlocks more doors for project creators to raise funding. We’re excited at the potential the system brings to the crowdfunding industry and will seek to make further enhancements to the model in the future. Tell us what you think about this new model on our community hub!