03 Jun 10 Benefits of Crowdfunding
Crowdfunding is quickly becoming a popular way in which people raise money for their projects. It requires a lot of cooperation from various sources so as to raise the required funds for each project, and despite the intricacy of the campaigns everyone who is Crowdfunding runs, the number of projects s growing and the funds raised on each platform is growing. This tells us that there must be a great number of benefits to using the Crowdfunding model to finance your project. Some of them are:
- It helps you finance your project. If you have any project that you thing is brilliant, then Crowdfunding could help you raise the money you require to launch and/or develop it.
- It helps you cost efficiently analyze your market in terms of consumer interest and product demand. After you launch your project, you are bound to receive feedback from some or most of the people who view it and thus will be able to assess if your idea is a hit or a miss
- Your product or service doesn’t have to be a large recognizable brand to succeed. The motivation of donors on Crowdfunding websites is mainly to make a difference in people’s lives and the community, so they are more interested in what is the project is about than in what name it bears. This gives everyone a level playing field on which they could succeed based on the quality of their project and not the name of the brand.
- Crowdfunding breaks all geographical barriers that may hinder business innovation, funding and investment. A lot of platforms allow people from all over the world to post their projects, offer translation tools and integrate systems that can handle a lot of different currencies. This is great because one doesn’t have to see or meet with the investors or donors for them to be able to chip in. Technology has made it possible for this to happen and Crowdfunding has leveraged technology to bridge a gap in financing.
- It gives you direct access to potential clients who give invaluable feedback on how a product or service can be improved. This helps one cut costs as products can be improved before they ever hit the shelves.
- Crowdfunding allows one to keep ownership of their company without giving away substantial equity of the venture or project.
- One can use Crowdfunding to pre-sell their product or service and use the retail revenue to develop their product. This is highly dependent on what the product or service costs and one’s ability to convince donors to pay for the products before they are released.
- The greatest thing about Crowdfunding is that the donors become the sole marketers of the project because they believe in it and would really want you to succeed.
- During the campaign, one gets to learn a lot from the useful advice they may receive from the donors. The donors may cultivate a relationship with the project heads so as to offer professional advice even after the campaign is over.
- The project owner controls everything during and after the campaign; cost of goods, delivery, rewards of sponsors, marketing techniques, customer interactions etc.
There are probably a lot more benefits than we have listed. However, these should be able to convince you to use a Crowdfunding model to kick start your project.