How Do I Crowdfund My New Business Idea?
When seeking to raise capital for your start-up, a new and increasingly popular option is crowdfunding. Crowdfunding can allow you to raise funds for your start-up when the bank does not necessarily see the value in your idea. Even if the bank does not see the value, if it is a good idea, there maybe plenty of people who do, and could even be willing to invest.
Here are some tips on how to create a successful crowdfunding campaign to get your start-up off the ground:
What Is Crowdfunding
Crowdfunding is basically social media’s answer to raising money. You post your project on a crowdfunding site and investors who think you have a good idea can contribute. Often in exchange for their donations, they get certain perks like a chapter of the book a fund-seeking writer is writing or exclusive behind-the-scenes footage of a film by a fund-seeking filmmaker. In the case of businesses, crowdfunding now makes it possible to offer stock to non-accredited investors.
- Know Your Audience
Knowing who your idea will appeal to will help you to not only develop a well-honed pitch, but will also help you to determine which crowdfunding platform to use. Each platform has a slightly different character or target audience, so knowing which one is for you will help.
- Make a Solid Plan
This plan is important in deciding how you are going to run your campaign. You will see the greatest interest at the beginning and at the end of your campaign. Things may seem to drag a bit in the middle. Keeping investors and potential investors abreast of how things are going throughout the campaign can help to keep interest up. You might, for example, send emails to investors to notify them as each stage of your project is completed.
You will also need to have a detailed plan so that you will know how much funding you need and exactly how you will use it. Investors like a detailed plan of how you plan to spend their endowment to your project.
- Your Pitch Should Impress
There are plenty of other people out there who are looking for funds. How are you going to get investors attention? Sometimes it is about telling a good story. You may need to offer compelling rewards — like giving non-accredited investors the opportunity to get in on the ground floor of a start-up — and sometimes you have to show that what you are doing has real value. Whatever strategy you use, your window of opportunity is small, so make it count.
- Post It On Social Media
There are many ways to get attention for your campaign, but remember that crowdfunding is the ‘love child’ of social media and fundraising. Do not be afraid to let friends and followers know about it.
- Don’t Forget To Say Thank You
The perks that you should be offering are a great way to interest investors, but do not forget to acknowledge their contributions once those contributions have been made.
Crowdfunding is a great avenue for raising capital when more traditional ways to get funding may not be available. Using a few of these tips can help you to develop a successful campaign and get you the funding you need to get your new business off the ground.
Keep an eye on the Nationwide blog for more tips for getting your small business up and running successfully.