Crowdfund Rescue LLC Shares: 4 Ways Small Businesses Can Use Crowdfunding
It’s arguably the most remarkable story of the 21st Century: the rise of crowdfunding. The idea of using the internet to solicit contributions from a large number of people has drastically reshaped the business landscape. To say the least, projects that wouldn’t qualify for funding from traditional sources now get the chance to see the light of day.
But crowdfunding isn’t just about fundraising. A successful campaign also creates a base of supporters who feel like they have a stake in the project’s future. No prizes for guessing that you need a solid strategy and sound execution to achieve that part — that’s why you bring Crowdfund Rescue LLC into the equation. They can help you not only in reaching out to interested networks, but also in pitching your idea. For now, though, let’s take a look at the ways through which small businesses can utilize crowdfunding.
Equity-Based Crowdfunding to Help Launch a Company
What’s a first-time entrepreneur to do in an era where financiers demand proof of concept and sales forecasts? You simply use the internet to pitch your venture to the masses. Equity-based crowdfunding allows you to reach out to accredited investors as well as everyday consumers.
As the name suggests, this approach involves offering part ownership of your venture in exchange for funding. The concept is pretty simple: you pick a platform, create your profile, and devise a pitch that outlines your business model. Obviously, you will also include details that’ll help investors assess your company’s potential. Those who come through with funds become part-owners, which means they’ll be entitled to a share of the profits generated thereafter.
Launch a Product
Bringing a new product to market has always been daunting. On one hand, it takes a tidy amount of resources to develop the concept from scratch. After that comes the headache of how to take it to market and build a customer base. Turns out that that there’s a way to kill two birds with one stone: launch your product on a crowdfunding platform.
Known as reward-based crowdfunding, this approach leverages the internet’s ability to bring together disparate individuals with common interests. Here’s how a typical campaign works:
-An individual/business posts their project on a crowdfunding platform like Indiegogo/Kickstarter. The campaign will have its own dedicated page consisting of a video explaining the story behind the project, and a list of rewards that backers will receive for contributing. The fundraising deadline will also be specified, along with the target amount.
-The campaigner releases special promotional videos to spread the word and attract potential backers. This usually takes place throughout the life of the crowdfund.
-Once the funding target is hit, money changes hands, and rewards are committed.
-Fulfillment (i.e. delivering rewards to backers) takes place within a few months of a successful crowdfund.
This route has proved particularly suitable for products with a niche appeal such as video games.
Launch a Service
It’s often said that crowdfunding inherently favors products. The reward-based approach seems to favor businesses that have something tangible to offer potential backers. Anything else, and it becomes a lot harder to sell your appeal.
Or does it? Success in crowdfunding hinges largely on communication — the ability to outline what your concept entails, and why it matters. The kind of reward on offer also counts; it takes a convincing incentive to charm people into throwing their hard-earned money behind your venture. If your service offering ticks both boxes, you’re pretty much good to go.
Conventional wisdom dictates that crowdfunding should work as well for nonprofits as it does for regular businesses. After all, the idea of contributing towards a noble cause is nothing new. Donation-based crowdfunding simply aims to take it further by bringing the message to a wider swath of the population.
This approach works much like other nonprofit fundraising avenues; you start recruiting support for your campaign right from the moment you launch it. Donors will support your initiative(s) financially, but without getting any reward or equity in return. It goes without saying that donation-based crowdfunding is suited exclusively for charitable organizations.