Crowdfunding is an almost riskless way of raising money
If you have a project or a business idea that needs money to become reality, you should seriously consider crowdfunding it. There are many advantages and few disadvantages, making it almost mandatory for any entrepreneur to at least consider it. Let’s see them.
Postpone your product or project development, saving time and money
You don’t need a detailed business plan or a few working units of your project to crowdfund it. That doesn’t mean you can go without a plan, of course, but you can postpone the details. All you should do is trademark your name and register a provisional patent of your product.
One or some videos showing how your product will work, a basic cost estimate to make your product reach the market, a good project webpage and some outreach to social networks are enough (and that’s cheap). You don’t need to start your company and sign many contracts before beginning.
Test the acceptance of your product concept before it hits the market
Crowdfunding is a great way to check whether there is actual demand for your product. Should your campaign fail after some marketing, you won’t waste your money producing something that’ll just occupy space at warehouses.
Basically, by crowdfunding your idea, you run into a lot less risk.
Leverage on crowdfunding platform’s audience
Big crowdfunding sites like Kickstarter or Indiegogo are not only platforms where you park your project and do it all on your own. Actually, they have their own audience and distribution channels. People flock to them in order to find something interesting to pre-buy or invest.
So, while you have to invest some time and money at the beginning in order to attract some backers and attention, you’ll get free advertising when your campaign is successful.
You can make a solo flight
Attracting an accredited investor is a time-consuming activity. You may spend so much time on it that if you are not convincing enough you may end up with a failure. After all, nobody will give you 6 or 7-figures sums without being reassured that the investment will pay off.
In crowdfunding, you appeal to a lot of people at the same time, all of them giving you very small amounts. And they can be pre-buyers, not necessarily business partners with whom you would have to share your profits.
Backers also face less risk
As the sums are small, backers also have less to lose. As such, your product or project looks inexpensive to them. That makes them much more willing to give you money to turn your idea into reality.
Have a good project with an appealing product, supported by a good video, a good page, good rewards and a good reach and you should be on your way to success.