Startup Business Help - Is Crowdfunding For Me?

Startup Business Help – Is Crowdfunding For Me?  

Are you planning to start a business but you can’t think of a way to secure enough funding right away? Do you think your business concept is so unique that people would be interested in supporting it? If your answer to both these questions is a yes, then you are probably thinking to venture into crowdfunding.

Crowdfunding is simply letting other people, primarily those on the Internet to fund your project or business once you have presented them a plan or a proposed product. There are already a number of startup businesses who have used this strategy in getting the funds they need. Some crowdfunding projects include video games, gadgets and other unique ideas.

The Elements Of Crowdfunding

Due to the success of some groups and individuals who have chosen this direction to start their businesses, you may think that it would work as easily for you as well. If you strongly consider crowdfunding as the only way for you to generate enough capital to get your project or business going, you should first take note of these three major factors:

Initiator – This is you. You will be the one to ‘initiate’ the interaction within the crowdfunding platform so other people can know more about your project idea or business concept.

Platform – The platform is the means by which you connect to your audience, the people you expect to fund your business. Some popular platforms include Kickstarter, IndieGoGo and RocketHub.

Supporters – Once you have chosen a particular website to launch your campaign, then you are opening your business plan to a worldwide audience. However, they will only remain an audience until they actually take the step to support your plan. Once they do, they will turn into a supporter.

Important Reminders Before Using The Crowdfunding Plan

Engaging into crowdfunding is not as easy as it looks. You don’t just think of an idea and then present it to your audience or potential supporters. There are a number of factors you have to consider first in order to increase your chances of achieving your funding goal.

  • Plan Thoroughly – The secret to crowdfunding success is to plan your business proposal or project carefully. Don’t expect your audience to fund your project if you just state them your idea without any concrete steps on how you would achieve it. They will be investing their hard-earned cash on someone or something they don’t know, so expect them to be very particular when it comes to details.

  • Choose Your Platform – Make sure you pick a trusted platform that can properly host your project. I recommend doing research into the popular ones like Kickstarter, FundRazr, RocketHub or IndieGoGo before you decide to use them.  Remember that if anything goes wrong concerning the platform, it is your business’ name and reputation which will be at stake.

  • Understand The Risks – No crowdfunding plan is risk-free. If your project is incredibly unique or one-of-a-kind, which ultimately leads to achieving your crowdfunding goal, you can expect copy-cats to emerge in the long run. This is a risk that you need to take if you really want to raise funds through crowdfunding.

  • Take Care Of Legal Issues – Before you begin the crowdfunding campaign for your project, you have to check whether you need to file with the appropriate securities authorities such as the Securities and Exchange Commission in the US. Inability to file the needed documents may be penalized by law.

  • Crowdfunding – Is It For Me?

    Now that you are more aware what crowdfunding is and how it can help your business project grow, it is now up to you to decide whether you want to choose this option or not. Indeed, achieving your target capital for a particular project in just a short period of time is enticing, but you first need to make sure you have met all the qualifications to avoid problems later on.

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