Looking to Crowds to Fuel Your Dreams
Crowdfunding has emerged as a revolutionary way for people to acquire funding for their business
endeavors. Rather than looking to more traditional investors, entrepreneurs have begun to look to the
public to back them during the development process. Crowdfunding has a number of benefts for founders
of emerging startups.
An important part of product development is market research. Many crowdfunding platforms allow
creators and contributors to communicate with each other throughout the development process. The real
time responses to project ideas can help creators gauge what their audiences want, reducing the amount
of time they must devote to attending conferences and developing focus groups.
Building a Customer Base
When a startup is funded by large group of people who believe in its core values, it has a built-in loyalty
base. Backers choose to fund projects when they want to see them come to life, implying that they will
continue to be customers as the startup becomes more established. Customers who are passionate
enough about new ideas to provide fnancial backing are also likely to be helpful in word-of-mouth and
social media marketing.
Making It Social
For better or for worse, social media has become an infuential force in the business world. It is the tool of
choice for businesses old and new. Certain successful entrepreneurs have found ways to use this
phenomenon to afect change in the market. For example, business executive David Kiger’s Twitter
profle ofers a wealth of business tips and information to his followers. Using social media for business
mentoring and collaboration adheres to the current trend of taking the market online and making it a social
experience. With this in mind, consider the way that crowdfunding is related to social media.
The sharable nature of crowdfunding platforms makes it possible for people all over the world to fnd out
about new ideas. Just a few clicks can expose millions of people to innovative notions, making it more
likely that these innovations will reach people who are interested in them. Crowdfunding could even be
considered to be a type of social media, since backers are often able to leave comments, provide
feedback, and form connections with creators.
As startups grow, they need to have presence on other forms of social media as well. Company owners
can use their crowdfunding sites to advertise these increased presences to those with whom they are
Lower Costs and Greater Control
In more traditional types of investing, the investors become shareholders in the company, so those
seeking funding lose some control over their ideas. Often, people who use crowdfunding are only
obligated to pay fees to the website and provide rewards to their funders. These rewards can take various
forms and can be of negligible cost to the company owner. This means that by using crowdfunding, you
can maintain equity of your startup throughout the development process.
The number of people who not only have great ideas and the skills to create them, but also the fnances
on hand to produce them is rather small. Crowdfunding ameliorates this issue. For example, the video
game industry was dominated by a few large players for a long time, making it difcult for creators with
more limited resources to break through with their ideas. In recent years, various crowdfunding platforms
have provided a wider variety of people with the opportunity to bring their ideas for new video games and
consoles to the public.
Building Your Reputation
Having to keep a large group of funders abreast of your progress on a public forum holds you accountable
to them. Entrepreneurs who rise to this challenge have the opportunity to establish a solid reputation
among potential future clients. Investors are likely to have greater trust in the abilities of startup owners
who they witness working through challenges and following through on their plans. Transparency is an
increasingly desirable trait for businesses to have, so investors will appreciate the accessibility to the
Traditional investors generally do not want to see their money used for risky ventures. While this is an
understandable position, it can place a limit upon potential. Many world-changing innovations have been
born of edgy concepts. Crowdfunding enables members of large groups to invest in a project without
much risk to them as individuals if the project does not succeed. Since they do not expect to see a large
return on investment, crowdfunding backers are often motivated by the novelty of witnessing the
development process. This enables startups to take more daring steps with their business models.
Crowdfunding Promotes Motivation and Collaboration
Crowdfunding is a concept that is oriented towards innovation, collaboration, and belief in the product that
is being designed. When entrepreneurs are backed by large groups of people who share their vision, it
can motivate them to do their best work. Public platforms also promote accountability and transparency,
which creates greater investor satisfaction. While there are a number of factors to consider when looking
for investors, startup founders who are fueled by passion may want to turn to crowdfunding.
A great reqview why crowdfunding may be better to fund your business than the standard investment approach.