Things To Know Before You Opt For Crowd Funding To Raise Money For Your Project
A method of raising money for various sorts of purposes – Crowd Funding has become very popular in recent days than ever earlier. If we sit and wonder, how would have all this started…? Someone would be in need of money and his friends and family would have all contributed little together to fulfill his requirement. And today we have online platforms, where even other people can allot fund as a donor or investor.
With technology, scope of investments and projects to invest in have raised multifold. This has resulted in the mounting of the competition. On these platforms are innumerable people, commercial enterprises and charitable organizations that are looking out for funds.
To get funded, you have to make yourself stand out.
As a fund seeker, you don’t want people to simply know that you have a project that calls for capital or charity. You need funds. A sufficient amount of them. And this is all easier said than done.
Here’s what you must know before you opt for crowd funding:
You will have to prepare a campaign:
That’s something like a pitch. A marketing strategy to raise funds. And you need to work hard on this. Maybe harder than you work for the project itself. You don’t have to build a campaign for name sake. Everyone has a campaign. You will have to make the campaign different, one that helps attracting good investors.
Campaigning includes telling the audience about your project, your cause. What is it about and how is it worth investing in. Convince your potential investors that you will put the money to its best use. Tell them your purpose behind the project.
Furthermore, don’t just create a page, put all your details and sit idle. It’s more of a continuous process that lasts untill you get the funds, and sometimes even after you get the money.
It takes a lot of effort and time. So be prepared for this beforehand.
Choosing the right platform for crowdfunding:
First you have to decide whether you will be using offline modes or online sites? Make a list of pros and cons and determine which one to go for.
Then see if the ‘crowds’ and your mindset match. Whether the genre is same? You can’t expect money for your leather craft business from a crowd that supports animal welfare. Then, how many projects has the crowd fund supported? Are they too picky? What features does the website have? How long is the processing time? All such questions are to be evaluated.
Before you ask, you must recognize how much you want:
You should know the amount of money you require, as well by when you would need it? What if the availability of funds is delayed?
Along with this, you will also be asked how you’ve come up with this number. Hold all your calculations and papers presentable and ready to hand.
You need a plan to spend the money:
Don’t expect donors or investors to fund you unless you tell them how, where and when will you use the money they provide. They would definitely want to see your “use of funds” description.
This will ensure them that you have a proper plan for the money and you are not misusing it.
Know the crowdfunding funding cost:
Getting funded is not free nor easy. It is important to consider the ‘cost of raising funds’. This includes campaign cost, salaries to people employed specially to deal with this getting-the-fund thing, fees by the crowd funding platform, etc.
Also, what are you going to pay back to the investors must be taken into consideration. The rewards for the fund provider. Does the donor get a memento? Will it be fixed-interest payments for borrowers?
Being one tedious purpose to achieve, crowd funding can be successful, provided necessary prevention and preparation is done. People won’t simply pass up their money.They need reasons and statements that the intention is worthy. Its hard convincing people, but not impossible.