Quite possibly, the most difficult part of having a great idea is being able to find the money to turn the idea into a reality. In my last post, I detailed how being low on capital is one of the most common excuses an entrepreneur can make. Finding an investor pre-revenue is like winning the lottery and pooling money from family members can get unprofessionally personal.
The concept of crowdfunding has been growing in popularity — think Kickstarter and Indiegogo. These platforms have creative focuses and are a great ways to fund your startup.
Recently, I advised a team that is designing innovative cutlery — Brew Cutlery incorporates bottle openers on the back of every utensil. The company needed assistance regarding figuring out how to fund the first production run and turned to crowdfunding for the following three reasons:
Extremely Cost Effective
There are no costs associated with launching a crowdfunding campaign. Write all of the content yourself and ask friends or colleagues to edit it. If you have a product to show, rally your network to find someone capable of taking professional photos. For your video, most anything will do (I've seen videos shot with iPhones).
But if you want something more professional, reach out to your friends who are into videography. As a college student, I contacted the director of my university’s news station and asked him to send an email blast to the members. Within a week, I partnered with a skilled videographer who was looking to gain experience.
Tests Your Market
Crowdfunding is one of the best ways to gauge whether or not your product is in the correct market. You may receive comments about your campaign and may edit it based on the feedback you receive.
When preparing to launch a campaign, make use of the preview link that many platforms provide. Send this preview link (or a screenshot of the preview page) to family and friends asking for their opinions. If you want even more insight, contact media outlets that have featured crowdfunding campaigns in the past.
The supporters of your crowdfunding campaign are your customers. Crowdfunding is basically a way to pre-order products before they are produced — this is invaluable for a startup. Too often, people produce products before knowing the depth of their customer base. Utilize crowdfunding so you have customers before your product is produced!
Treat your supporters well and you’ll likely be funded. The rewards for your supporters should mirror this — no one wants a boring reward. Spice it up with some flare.
Have an idea? Now it’s your time to launch. Check out Kickstarter or Indiegogo, the two most popular crowdfunding websites. Though around 80 percent of campaigns are failures, you’ll never know if you don’t try. People with goals of $10,000 sometimes raise over $350,000. Your potential exists — it’s your choice whether or not you want to make the most of it.
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