Do you want to raise money for your idea, but you’re not sure where to start?
Let’s talk about what crowdfunding is and how you can make use of it.
What Is Crowdfunding?
Crowdfunding is the act of raising money from people over the internet to fund a cause, project, company, or goal.
Although there are many types of crowdfunding, Kickstarter and Indiegogo are labeled as rewards-based crowdfunding. What this means is that people contribute funds to you in exchange for a reward that you will send to them.
Crowdfunding Validates Your Idea
All products need validation before arriving on the market. That’s how larger companies know where to invest their funds. If tests show that people demand a product, they’ll continue to churn it out.
Crowdfunding provides market validation on a smaller scale and makes it accessible to you and me. This is important because as individuals, we don’t have a bottomless pit of funds or time to sink into an idea, only to have it fizzle out. When you see that people are interested in your project, you factually know that you’re actually onto something and that you’ve discovered a true need in the market.
With crowdfunding, you’re making sure that people actually want what you’re making. The key is that you’ll know there is demand for your product even before you go ahead and blow money on inventory or advertising. It ensures that other people actually want to use it and enjoy the benefits.
Crowdfunding Gets Your Idea Funded
There are many routes to obtaining funding from your own savings to Angel Investors, to Venture Capital, and to bank loans. And there’s also crowdfunding. At its core, this is what crowdfunding is all about – getting funds for your idea. The great news is that both Indiegogo and Kickstarter are great platforms to tap into the power of the crowd to get funding for your project.
There’s a lot that you can do with the funds that you raise. You could use it to fund an entire production run for your product. You could put it into sourcing supplies for your project. You could use it to make additional prototypes. You could use it to kickstart a whole business idea.
What’s pretty incredible about crowdfunding is that you’re actually getting that direct connection with your customers. There’s no if/maybe/but/why, but rather that direct line of communication between you and the people who want your product. They’re strangers in the world who take notice of your idea and want it to exist so they pay you to make it.
Crowdfunding Brings Attention
This attention can take the form of backers, their friends, and their network, but it also can mean the larger media landscape. You can have everyone from bloggers, vloggers, reviewers, journalists, and influencers discuss your work.
Having a public crowdfunding campaign is also a great way to get the attention of retailers, partners, and others who want to work with you in some capacity. There are many projects that have achieved success on crowdfunding that has gone onto larger successes after a successful campaign.
You’ll gain a bit of a micro-celebrity effect when doing a crowdfunding campaign because people around the world can visibly see how much money you’ve raised.
Crowdfunding Sets You Up For Bigger Gains
Everything you do with your crowdfunding project is a foundation for bigger gains. You might just want to launch this one idea to the world, but for many of you, it’s the start of something more.
It’s the start of releasing many more new ideas.
It’s the start of pitching for more funding after getting the validation.
It’s the start of a thriving business.
It’s the start of getting the freedom to work on what you love, every day.
To most people I talk to, crowdfunding is always much more than obtaining money from the crowd and delivering a product. Ask yourself this – why do you want to crowdfund? This won’t be easy to hear, but crowdfunding isn’t easy. There will be days where things don’t go according to plan and you become dejected and demoralized. Remember back to your why and always let that be your shining light.
Where Should You Begin?
Crowdfunding can be a daunting task and bring up a lot of fears and worries.
Where do I even start?
What if no one wants my project?
What if I fail?
I assure you that these feelings are normal and you’re not alone. Here is the one place I’d recommend you get started: I compiled a handbook to help you get a 5,000-foot view of your launch. It’ll go over how to plan your launch and what to do (and not do) going up to it.
The most important thing is that you get started. Don’t put this off. If you want to crowdfund your idea, then start learning about how it works. Start reading through the blog posts, start watching YouTube videos on how it all comes together, start talking to people and asking questions in the group.
By building this strong foundation for yourself, you’ll soon be able to have the know-how and confidence to launch your project and absolutely crush it.
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