Crowdfunding is a method of financing projects, ideas, enterprises through turning to many small financiers for support or donations, frequently via special crowdfunding websites. There are many advantages in starting a project with crowdfunding. Here I list six reasons, apart from procuring financing for the project, why it is worth starting a crowdfunding project.
1. Projects seen as impossible can be started
The obvious answer is that with crowdfunding you can procure financing for a project, idea or enterprise. A further reason is that it enables one to start a project that otherwise would be impossible to implement given that sources of traditional finance are lacking. Instead, with crowdfunding, you have the chance of bringing in money on the basis of the principle that “many small brooks make a big river”.
2. Creates commitment
When people are involved and bankroll a project they tend to become extra committed. They are keen to know more and follow developments during the progress of the project.
3. You acquire ambassadors who give publicity
Via crowdfunding you gain support amongst your donors who are ready to talk about projects within their networks; this can mean that it goes viral and attracts publicity to your project.
4. You obtain valuable feedback
Given that at an early stage you start to communicate your idea with the project’s future target group, you acquire early feedback as to whether your idea will actually take off as well as tips on improvements. Even those launching projects that do not become super viral or achieve enormous success usually think they have acquired valuable feedback and have learned something about themselves, their projects and their market.
5. Creates long-term relationships
Through crowdfunding, you directly reach your target group and build relations that last a long time. This strengthens your project and impels you in the right direction.
6. Increases the chances of obtaining traditional financing
By building up a “crowd” around your idea you can also show the major financing providers that a high level of interest already exists amongst target groups; thereby you increase the chances of also attracting the traditional providers of finance.
You are welcome to read part 4 in this article series on crowdfunding -11 tips on how to achieve success with your crowdfunding project.
You are welcome to read also the previously
PART 1 – What is crowdfunding?
PART 2 - 6 reasons why people contribute to crowdfunding projects.
Many thanks for reading the article!
You are welcome to comment on the article and report on your own experiences concerning crowdfunding.
Online Marketing Manager, ComAround