Episode 1

Episode 2

Crowdfunding basics

Crowdfunding enables innovators and creators with great ideas to raise the money they need by bypassing the banks, venture capitalists and other redtape, and instead pitch ideas straight to the market.

It’s not only a way to raise money either it has many benefits such as:

  • building a broader awareness and support for a project;
  • enriching a brand;
  • and serving as a testing ground for new products or services.

Crowfunding categories

Is crowdfunding suitable for me?

Your answers to the following questions will to a large extent determine if crowdfunding is an option for your project.

  1. Do you have a business plan?
Evaluate your product and business plan. Do you have a viable strategy of how you will apply the funds you’ll be getting from the crowd? Do you have a prototype, or some working example that your idea has the potential to be commercially viable? Funders need assurance that your idea is authentic, or they won’t part with their money.

  1. Have you calculated the amount of money you need?
It’s not as easy as just creating a campaign and hope the money will flow into your account! You need to establish a financial goal that is realistic. Have you calculated the amount? If so, how did you go about your calculations? There is a huge number of factors to take into consideration to ensure that you’ve not over or under calculated this number. It’s of critical importance to illustrate to your funders how, when and where you’ll apply their funds.

  1. What is your value proposition?
Funders want to receive a reward in return for their contribution towards your campaign. What do you intend to reward your funders with? If they perceive that your idea offers value, they are more likely to hit the ‘fund now’ button. Multi-tiered rewards are a must, starting from as little as a $1 reward. Think outside the box when you determine the various rewards and the values thereof.

  1. Who is my crowd?
Have you done market research around your idea? Who is your target market? Is your product gender or age specific? Where is your crowd located? Are they pricing sensitive and do they have similar products to choose from? Without this knowledge, you won’t reach the crowd you’ve got in mind.

  1. Do you have an established social media presence?
Most crowdfunding campaigns have limited time-span to reach their funding goals. That means you need to hit the ground, running. You need an existing audience who might be willing to contribute to your campaign, or at least spread the word about it, and that requires a lot of preparation. As minimum requirements, you need to have at least an existing website. Additional social media exposure through Facebook, Twitter, Instagram etc. would count in your favor to spread the word around your amazing idea.

  1. Do you have the necessary time to design and implement your campaign?
Crowdfunding campaigns don’t automatically become successful, not even if it’s the next BIG thing! Your campaign needs the support of passionate, dedicated founders who make videos, engage with users, share new content and use marketing campaigns like SEO and social media to promote their crowdfunding pages. It takes a great deal of time and effort to nurture a crowdfunding campaign to success; are you willing to make that investment? These are only a few of the most important questions you need to ask yourself. There is a lot of other aspects you’ll need to familiarize yourself with. If you’re still not sure if your idea is suitable to crowdfunding, contact us for an evaluation of your idea, that’s what we’re here for!

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