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Crowdfunding involves taking your idea or product to the masses and asking them to help fund its creation in exchange for a reward. That could be as simple as a free box of cupcakes from a fledgeling bakery or as enticing as an equity stake in your growing company.
Sounds simple enough. But if you’re unsure whether launching a crowdfunding campaign is right for your business, here are 5 reasons you may be glad you did.
- Tap into and grow your customer base. The majority of crowdfunding donations will likely come from your existing network and connections (and your connections’ connections). Getting people excited about your new venture even before it’s fully up and running helps proactively build a strong network of support.
- Get market feedback fast. Are your eco-friendly, recycled socks priced too high? Do people really want a Bluetooth-enabled dog leash? Is there really a market for a raincoat that doubles as a bathing suit (okay, now we’re making things up)? Point is, crowdfunding lets potential investors/consumers weigh in on the merits of your idea, and you can iterate as you see fit.
- Connect with investors who truly care. For many investors, the appeal of crowdfunding is simple: it’s a tangible opportunity for them to help a brand they believe in. At a time when consumers are increasingly asking businesses and brands to do good, crowdfunding lets your prospective customers invest in something they feel is meaningful.
- Level the playing field. All you really need to launch a crowdfunding campaign is a good idea and an Internet connection. That means just about anyone can make their pitch and try to reach their fundraising goals. In that sense, crowdfunding has levelled the playing field for entrepreneurs across every demographic.
- Start out ahead (not in the red). Let’s not forget this final, crucial selling-point for crowdfunding: If your persistence and dedication pay off and you reach your funding goals, your cash infusion comes in completely debt-free. Cha-ching!
QB Community members, have you run or supported a crowdfunding campaign? Tell us: what was great about it – and what wasn’t? We’d love to hear your story in the comments below!
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