By Solomon Nabatiyan. Most startup companies usually face a lot of glitches especially in the initial phase of setting up a business. As a startup tech company, you may have a world-changing product and are ready for business to bring it to the world. But if you cannot manage to obtain the funding you need to get up and running, the product is as good as nothing. As an entrepreneur, it is also equally important for you to make people see what makes your idea so special. If you cannot do so, the greatest of ideas and plans can come crashing down.
Crowdfunding is a unique solution that has already helped numerous entrepreneurs and their startup companies have access to that all important launch pad for their products. You can truly maximize your chances of success by using a crowdfunding platform for project fundraising, particularly for technology products and services. The following are 5 significant benefits startups enjoy by using crowdfunding services.
No Dependence on Banks
Applying to a bank for a loan is a tedious process. Getting bank loans for innovative ideas is not all that easy and these days requires a spotless credit history and a lot of convincing. Then there is the hassle of collateral, high rates of interest etc. making it a costly and risky proposition. On the other hand, with crowdfunding, you can always share your idea through large inter-connected networks of relevant supporters and backers such as social media tools. If you present and spread the word about your startup and its product/service well enough, you can be rest assured that the contributions will flow in. At this stage of your project, all of your activity also serves as free marketing and the building of a fundamental support base that you can draw on much later on as your business develops.
Free Publicity and Press
As if simple and straightforward, no-strings attached funding was not enough, with crowdfunding, you can also reap the benefits of free press. Once your project starts making a name for itself and becomes popular, you can leave it up to bloggers, online papers and other forms of media to publicize your cause on your behalf. While other entrepreneurs can be found scrambling for this kind of publicity, through crowdfunding you will get free access to it in addition to a contribution stream of revenue to help our startup during its leanest times when operations are just getting underway.
Validation of Your Idea
As an entrepreneur and new startup, it is not just enough for you and your closest circle to appreciate your idea, technology and vision for a product or service. If others, particularly your intended customer base, does not see sense in you or your products, it will ultimately not sell. As a result, every contribution you collect towards your crowdfunding project is like a vote of validation for your idea.
Using crowdfunding to collect contributions from people who support your idea and believe in it is one of the biggest advantages of using this method. This is always a better option than going about the old fashioned way and taking the assistance of investors who over the past few years have become increasingly demanding, short-term oriented, bottom-line driven and uncompassionate to the original founders of a company or inventors behind it. As crowdfunding does not impose you restrictions and never tells you how to run your business or ask you to give up anything in return for the contributions you collect, you can always exercise more control in executing your project and assure a more successful transition from a new startup to established firm.
Once you are able to run a successful project on a crowdfunding site, your credibility in the market is bound to rise. This will help you gain extra leverage when going for future funding projects or funding from banks or traditional investors for big-growth spurts. Keep in mind that once you have a number of people who believe in your company and ideas, they will influence others as well and help spread the gospel. A healthy chain reaction of recognition, influence and popularity are all what crowdfunding campaigns can enable.
The best way to get started is to browse and chose one of a handful of recently launched crowdfunding platforms devoted to and specialized in technology startup fundraising. They are the key in providing entrepreneurs the power to raise funds specific to their technology projects.