Crowdfunding is a way of raising finance by asking a large number of people each for a small amount of money. Traditionally, financing a business, project or venture involved asking a few people for large sums of money. Crowdfunding switches this idea around, using the internet to talk to thousands – if not millions – of potential funders. Typically, those seeking funds will set up a profile of their project on a website such as those run by our members. They can then use social media, alongside traditional networks of friends, family and work acquaintances, to raise money.
People today crowdfund for medical expenses, educational expenses, nonprofit causes, for pets and animals, religious causes, sports teams, travelling, creative projects, new product ideas and even for memorial and funeral costs!
Get inspired by some amazingly successful campaigns: http://www.goodnet.org/articles/7-incredibly-successful-crowdfunding-campaigns
To put up in simple words, Individuals just ask for donations from their friends, family members, and peers and can create an online crowdfunding page to tell their story, upload photos, and accept donations.
And why? Individuals all across the world use crowdfunding to raise money for various projects, expenses, and life events. This is why you’ve been hearing this word a lot lately since everyone is into it.
Why would I trust something like this? Trust me; you have not known the power of social media yet. Social media is not just Google, Wikipedia or your networking sites like Facebook and Twitter, etc. (I have realized this only lately). But it also empowers people to tell their own stories and spread them to the world and their network of friends and family members. Since crowdfunding campaigns are highly shareable, it’s easy to spread the word and raise funds. At the least, you will at least get sympathy and publicity.
But you would argue about its risks and problems. It will not necessarily be an easier process to go through compared to the more traditional ways of raising finance – not all projects that apply to crowdfunding platforms actually get onto them.
You can’t achieve anything if you don’t have the required resources for the campaign.
Also, if you don’t reach your funding target, any finance that has been pledged will usually be returned to your investors and you will receive nothing (that’s so sad!).
Failed projects might highly damage the reputation of your business and people who have pledged money to you would feel defeated and would have second thoughts about trusting you.
Also, if you haven’t protected your business idea with a patent or copyright, someone may see it on a crowdfunding site and steal your concept. Yeah. There are cons everywhere online. You might think that my idea is so lame and crazy. Who will want to donate to it? Trust me, there are crazier ideas than yours and they actually succeed! Don’t believe? Then check them out here: http://smartycents.com/articles/11-craziest-crowdfunding-success-stories/
I totally agree that there’s a lot of efforts and risk involved. But just think about what if it actually succeeds? You enjoy the sweet success. All the risks put in are worth it in the end. After all, life is full of risks at every step. So let’s keep thinking positive.
To sum up on the benefits:
1. QUICK MONEY RAISING
Don’t underestimate the power of social media ever. With the right crowdfunding platform and ample promotion, a crowdfunding campaign has the potential to raise quite a lot of money in a very short amount of time.
Many campaigns have succeeded even in 30-40 days. But don’t get dejected if it does not happen to you. Keep trying.
2. AWARENESS CREATION
Crowdfunding can help you spread the word about an injustice, problem, disease, or social issue while you raise money. It’s an effective way to educate your peers. Even if they do not donate, they at least register in their mind that someone is raising funds for some cause and might discuss it with others too.
3. CONNECTING PEOPLE
It’s not just Nokia who does that. Even crowdfunding is a great platform to bring people together. People love to come together for one common cause. It gives them a sense of purpose and empowers them to raise money for something they care about. They are happy to know that there is someone else just like them. They love the idea of meeting new people who are like minded.
So what are you waiting for? Start your campaign today. All you need to do is choose an easy and effective site. All you need is a platform that is easy for your supporters and you to use. Choose this wisely. Since this can make or break your campaign.
Get to know some of the best sites:
The next step is to set up a goal and a deadline. This must be reasonable and achievable. I mean, you cannot expect to raise 1million in just 10 days. That would be like expecting your partner to actually pluck stars from the sky! You might not get the desired response initially. Don’t lose hope and keep going.
Your crowdfunding campaign should be unique. When every other person is now into it, ask yourself what is so great about my campaign that they would donate to me? What is so unique? Make the story as attractive as possible. If you catch their attention, you’re already halfway there. Make sure to add images and videos about you or the cause you’re raising money for. You should also tell your story and offer up your fundraising reasons.
The most important and our favourite step comes now. This is the chance to use your communication and people skills. Use your favourite social media sites to the fullest. (All my skills will finally come handy). Use all your word of mouth skills for people not much active in social media. This is like a one on one promotion for a personal donation.
Keep monitoring the progress and response to your campaign. Make necessary changes wherever required. Judge peoples reaction before taking a step. Make sure to post regular updates to your story and offer incentives to the readers. After your campaign target is reached, enjoy your victory. Make sure to acknowledge your supporters for their help and support. Show them how much you value them. The key to success is happy customers. Similarly, even here, if they are happy, they will support you for your future ideas too and refer you to their peers.
Hope you all are getting all you needed to know about crowdfunding. What now? Go on. Start your campaign now (even if the idea sounds crazy). Have hope, patience and determination. And if you start a campaign, do let me know too!