Crowdfunding has become more popular in recent years with increasingly more investors and entrepreneurs becoming involved. For this reason, popular crowdfunding sites like Kickstarter and Indiegogo are good places to consider funding your start-up.
Crowdfunding is an online platform for you to pitch your unique and innovative idea to a large community of donors. If people like your idea for a product or service, and agree that it can bring an innovative, cost-effective solution to a problem, they will contribute money to it. How much they contribute depends on them - some can only contribute small amounts, while others may contribute significant sums. As part of setting up your Kickstart campaign, you will be required to establish a target. Once this target is reached, you will have enough money to start and run your business.
However, crowdfunding’s rising popularity also means an increase in competition. Unless your idea is compelling and offers significant rewards, it will go unnoticed and join the vast number of projects that fail to get funding.
The key to a successful crowdfunding campaign is in crafting a compelling story. Most people highlight the product or service in their story and hide in the background. This is almost guaranteed to fail in convincing contributors. The smart entrepreneurs incorporate themselves into the story by telling the crowdfunding community what led them to the idea.
Since your start-up is for-profit, investors on crowdfunding sites would ask you to offer substantial financial rewards. Please take a look at the Founding Member program (Part 2 in this series) for ideas on how to incentivise your crowdfunding community.