5 Crowdfunding Benefits Beyond Capital

For Companies General June 20, 2016

5 Crowdfunding Benefits Beyond Capital

Crowdfunding has grown into a massive industry in the past few years, with experts predicting that it can grow into a 300B market. Start-ups around the globe have looked to crowdfunding as a source of capital to help get ventures started, and many have been fruitful beyond expectation. Kickstarter alone has successfully funded 107,495 projects with over two billion dollars donated. Crowdfunding’s success in raising capital is proven, but what about the more intangible benefits gained? Here are five benefits of crowdfunding, beyond raising capital.

Getting your company’s name in the spotlight is growing to become difficult as social media continues to become saturated. By initiating a campaign on a crowdfunding website, an idea or product breaks through the noise of social media promotion and actively asks people to get involved in your company and mission. Crowdfunding, whether it is donation, rewards or equity based, provides a forum that can allows start-ups to gain attention from potential backers and consumers.

Entrepreneurs gravely fear the possibility of investing time and money in a product only to later realize that the demand for their product is lower than expected. No investment has a guaranteed return, and testing the market for a product can be a time consuming and costly task. Crowdfunding makes this daunting task more simple and cost effective as companies are able to offer their product and gauge market demand before investing too much time or resources.

Growing a brand and building a foundation of loyal supporters is important for long term success. Crowdfunding creates contributors and investors who stay interested in the success of the companies to which they have contributed. A campaign has the potential to be more effective than an advertisement because it mobilizes early backers to encourage others to support the company as well. Backers become your own brand ambassadors, lobbying for the success of your company, because they have a personal stake in it.

When you are working on creating a product, it is easy to miss out on some key features. Crowdfunding provides a direct forum for feedback from current and potential consumers who, after having first hand experience with a product or business plan, have identified holes or issues you may have missed. Many companies have a great idea but are missing a key idea or trigger that could make them more useful and successful. Engaging current as well as prospective contributors can give you a chance to make changes early on, before getting in too deep.
Scrolling through your Facebook feed and seeing crowdfunding campaigns is an everyday occurrence. Crowdfunding campaigns are extremely shareable, as people who invest likely want their friends and family to invest as well. In fact, many campaigns go viral for this reason, whether we actively recognize it or not.

While capital can be the initial factor for launching a crowdfunding campaign, the five additional benefits discussed are are not be overlooked. Therefore, when considering paths for raising capital, it is important to recognize not only the amount of capital that can be generated, but also the many benefits that may arise from a crowdfunding campaign.

Please share your thoughts and comments below, we know everyone has unique experiences and views to share on the best ways they’ve been able to drive traffic to their blogs and websites. Tell us about your experience!

Leave a comment

Your email address will not be published. Required fields are marked *