It should certainly come as no surprise to the vast majority of business owners that a business cannot survive without money behind it. Whether you’re trying to get it off the ground, expand into a new line of products, or simply develop a new marketing campaign, there is very little that can be achieved in business without it having an impact on the bottom line. Because of this there have, historically, been a variety of different ways through which businesses have attempted to raise funds for their business. The most common in the past was to seek out investors. While investors could be incredibly valuable to pretty much any business, they also brought certain issues with them. Many companies became beholden to their investors in terms of the direction that they could go, which could often lead to a lot of frustration on the part of many business owners and employees. However, over the last few years, a new method of investment has arisen that could potentially solve a lot of these problems: crowdfunding. In the simplest terms, crowdfunding sites like Kickstarter and Indiegogo turn your customers into your investors. Allowing them to donate small or large amounts that can then help your business reach its financial goals. Here are a few things to consider if you’re interested in using crowdfunding to secure investment in your business.
Retain control
One of the main reasons that so many businesses find crowdfunding to be so attractive is that it eliminates the need to be at the beck and call of investors at all times. In fact, that’s often the main reason businesses turn to crowdfunding in the first place. Your customers are donating money because they believe in your business or product, which means that they’re willing to allow you the freedom to follow your own vision. Just make sure that you make that clear. Don’t offer rewards that give too much power over to single investors, even at the highest level. Otherwise, you’re just going to end up back where you started.
Make sure your campaign is as effective as possible
The way in which you pitch a crowdfunding campaign is very different to the way you would pitch to a more traditional investor. Traditionally a pitch would be a fairly dry, straightforward affair focussing on figures, statistics and financial predictions. Launching a crowdfunding campaign is much closer to a marketing campaign than anything else. Make sure that your campaign’s page is visually engaging, using images from sites like EyeEm, as well as well written and succinct. You may want to create a video for your campaign in which case you should probably connect with a professional production company so that you can create the most professional looking and impactful video possible.
Know the risks
It might seem as though crowdfunding is a sure thing for your business but, as with just about anything else, it comes with its fair share of risks. One of the major risks is that, with many crowdfunding sites, if you don’t meet your goal, your campaign is a failure and you return all of the money that was donated. You also need to be aware that a crowdfunding campaign can potentially get you a lot of attention. This can be a very good thing, but if your campaign fails or something goes wrong with your business or product, it can be something of a PR nightmare since your business is going to be so heavily in the public eye. Make sure that you’re always careful and that you don’t let ambition can in the way of realistic goals.
