New to Crowdfunding? Here’s What to Expect.

40Billion.com, Crowdfund Beat Guest Post.

With the popularity and success of crowdfunding as a new way to fund new projects, it’s easy for other aspiring entrepreneurs to believe that sites like Kickstarter are their golden ticket to launching a business. But the reality is, crowdfunding isn’t always as simple as it seems.

Whether you’re looking to raise a small amount of startup cash or acquire a larger sum through equity crowdfunding, there are a few challenges you might face during the process that you may not have expected.

cartoon concept for crowdfunding, businessman hand with light bulb and with money. vector illustration in flat design on blue background

cartoon concept for crowdfunding, businessman hand with light bulb and with money. vector illustration in flat design on blue background

Choosing the right platform

The first step is to choose the right platform. Not all of them are created equal. Platforms like Kickstarter or Indiegogo are great for raising smaller amounts of money, but equity crowdfunding portals are best for entrepreneurs looking for large sums of money. If you’re interested in the latter, it’s important to do your research and find the platform that meets your needs. Also, find an experienced attorney who specializes in equity financing.

Establishing a realistic goal amount and time frame

Many entrepreneurs, especially those new to the crowdfunding scene, tend to think that they will be able to quickly raise all the money they need and then more by the time their campaign ends. It’s important to be realistic about time and money when it comes to planning your campaign.

Consider how much capital you would need to take your business to the next major milestones, and don’t rely solely on crowdfunding sites for your fundraising.

Creating a buzz

Having a great business idea that is supported by friends and family is good, but it does not mean that the donations will come pouring in once you launch your crowdfunding campaign. Doing a lot of prep work before your campaign will help create and maintain interest in your project.

Before starting the project, gauging level of interest for your investment opportunity or project is a critical part of the process. Even though supporters have told you that they would support the campaign, it gets lost in their email inbox. Without specific requests, it’s difficult for people to actually pull the trigger on an investment or funding opportunity. Make sure you have personalized outreach to your first degree networks, and remember to ask for assistance in spreading the word.

When you’re ready to spread the word and create a buzz around your crowdfunding campaign or project, sites like 40Billion.com make this easy. They broadcast and promote your campaign to their large network of several million users across the most popular social networking sites for businesses – including Twitter, LinkedIn, 40Billion, and even Facebook. Innovative services like tweet ads and promoted company listings were created for crowdfunders to tap into a growing, active network online without spending thousands on pay-per-click ads or traditional advertising.

The risk factor

Everyone knows that there’s risk involved in any business venture. What investors want to know is, exactly how much of a risk will they be taking by offering you a large sum of money? Even small venture funds express interest in investing, but ask the entrepreneur to come back to them when they have an investor who is leading the round of funding. Everyone wants to know the amount of risk.

A lot of investors at the early stage simply want to de-risk investing by being the last money in the round once a lot of other sophisticated investors have already committed. This often creates a scenario where founders have a few hundred thousand dollars in “commitments” for months without any way to actually close on anything. Using a reputable equity crowdfunding platform with accredited investors can help solve this problem.

While the “lead investor” issue most commonly affects startups seeking large-scale investors, the same basic principle can apply to a smaller Kickstarter campaign: If potential funders see that no one is backing the project or that people are only contributing a few dollars, what incentive do they have to donate a large amount of money? This is where building interest and spreading the word become critical to raising the funds you need.

Even if you aren’t launching a crowdfunding campaign at this time, it’s important to learn about the industry, as well as what it takes to succeed.

Source:

http://upflow.co/l/5cIW/2017/01/02/new-to-crowdfunding-heres-what-to-expect-2

Tags: , , , , , , , , , , , , ,

HEADLINE NEWS

GizmodoCrowdfunding Is the Only Way Americans Know How to Mourn After Engineer Is Killed by TerroristGizmodoOne of Kuchibhotla's friends, Kavipriya Muthuramalingam, did what has become all too common in the wake of American gun violence: He launched a GoFundMe crowdfunding campai [...]

Entrepreneur3 Industries Being Disrupted by CrowdfundingEntrepreneurCrowdfunding is rearranging the way that entrepreneurs finance their creative endeavors, whether they're artists or engineers. From bringing startups a needed capital boost to getting students money to go to coll [...]

CBS LocalDonors Beware! More Scammers Are Targeting Crowdfunding SitesCBS LocalThousands of dollars raised to cover the costs of transporting Fauteux's remains and honoring her memory vanished, allegedly wiped out by their daughter's best friend, who had started a crowdfundi [...]

WTVD-TVCrowdfunding income could be susceptible to income taxesWTVD-TVCrowdfunding or crowd sourcing has exploded in popularity with the launch of websites like GoFundMe. Now, people are learning that money could come back to haunt receivers come tax time. One Florida couple found tha [...]

PYMNTS.comNEW REPORT: Crowded Crowdfunding And The Rise Of Social Fundraising FatiguePYMNTS.comWith more non- and for-profit organizations getting involved with crowdfunding, it's getting increasingly difficult for groups — be they for-profit enterprises or nonprofit organization [...]

Forbes4 Real Estate Crowdfunding Trends You Should Be WatchingForbesAccording to Massolution's crowdfunding report, money raised by individuals, budding brands and even established companies through crowdfunding platforms exceeded $34.4 Billion in 2015. Analysts even predict that [...]

NME.comPaul Weller crowdfunding to expand clothing labelNME.comPaul Weller is offering a stake in his clothing label to raise funds to expand the business. The ex-Jam frontman is looking to raise £400,000 for his mod-inspired clothing brand, Real Stars Are Rare, with a crowdfunded sha [...]

Business InsiderConfirmed: UK challenger bank Monzo raises £19.5M with another ...TechCrunchMonzo, one of a number of so-called “challenger” banks in the U.K. aiming to re-invent the current account, has disclosed a new funding round. Confirming most ...Monzo raises £19.5 million from [...]

USM foundation launches crowdfunding platform - WDAM-TV 7 ...WDAM-TVThis is a news release from The University of Southern Mississippi The USM Foundation has announced the launch of Eagle Fever - Southern Miss ...and more » [...]

9 to 5 MacSan Diego Girl Scouts crowdfunding iOS game project with Design Code Build9 to 5 MacThe Girl Scouts of San Diego are currently crowdfunding a new app coding project for an iOS game called Marshmallow Run. The project has just three days to go and over $10,000 left before rea [...]

CFB Finance

Marketwired

  • Crowdfunding
  • Crowdfund
  • Peer to Peer Lending
  • FinTech
  • Reg A+
  • Reg CF
  • Crowdfunding USA

Press Release

Live Crowdfunding .tv

What's Next Step in Regulation A+ JOBS ACTS Title IIII :L Interview : Steve Cinelli with Brian Korn Securities and Crowdfunding/Peer-to-Peer Lending Lawyer, Watch more video library | Conference | Interview | Campaign Showcase | Research | Education |