As technology provides more and more ways to simplify life, launching a new business or funding a new idea has never been easier. For visionaries, developers, and entrepreneurs, crowdfunding has been a saving grace. Whether you're not in a position to pursue angel investments or you don't want to take on a new partner for that investment, crowdfunding gives you a great way to fund your latest idea or your upcoming business expansion. Here are some things you need to consider as you think about crowdfunding options for your situation.
Think About Your Product Or Concept Carefully
If you are going to pitch a crowdfunding campaign, you need to take some time to carefully consider your concept or product. You need to be sure that the product or concept is actually marketable to consumers. That means having something that is going to either solve a problem or offer a value that doesn't exist right now. The best crowdfunding campaigns are for things that are unique, highly beneficial, and clear solutions to a marketable issue.
Know How To Express The Concept
In order to create a solid crowdfunding campaign that will encourage investors, you need to be able to express your product or solution clearly, succinctly, and in a way that will get people excited about the idea. If you can't get your potential investors engaged quickly and excited with a short passage, it's going to be hard to keep their attention on a crowdfunding site.
Remember that crowdfunding pitches are limited to just what you can put on the site. That means you need to make the most of the text, photos, and any video presentations you can post. Take time to make sure you know how you're going to present it before you create the campaign.
Provide Visuals Or Something Tangible
Crowdfunding is a great way to garner interest and financial investments in any kind of product or expansion idea. However, investors are less likely to put money into your campaign if they can't clearly see what they are investing in. If you are looking to launch a product or you have an expansion idea, you need to create something visual or tangible for investors to see.
Whether it means creating a prototype or producing some charts that clearly depict the demand and possible market for a service, anything that investors can evaluate is more likely to encourage them to put money into your crowdfunding investment pitch.
Determine How Much You Actually Need
One of the key components of a crowdfunding campaign is knowing exactly how much money you need to raise for your project or product. Before you can launch that campaign and start fundraising, you need to be sure that you know how much money your company needs to get the job done.
The last thing you want to do is reach your fundraising goal only to find out that you still can't deliver on the promises you've made to the investors. If you set your goal short, you'll find yourself in just that position. Take the time to logically calculate what you are going to need so that your fundraising goal is sufficient to complete the task at hand.
Identify Key Rewards You Can Offer
One of the great parts about crowdfunding is that you can set the reward tiers based on the amount of money invested. This is ideal for smaller businesses that aren't ready to sell a share in the business. Instead, you can give investors a vested interest in your project according to the reward tiers that you establish.
This does mean taking time to figure out what each investment level is worth to you in terms of rewards, though. Don't sell your product short and just promise a product to every investor, though. For those who want your product, they should be willing to pay a higher investment level, but that level shouldn't be priced higher than the value of the product itself.
Make sure that your reward tiers are valued appropriately and the rewards are things you can follow through on. Investors will expect to see the rewards that they contributed toward, and it will reflect poorly on your business if you don't deliver.
Contact a consultant to learn more about best practices for crowdfunding.Share