28/06/2016
What are the best ways to get startup funding in India?
Less than 2% of the companies end up raising funds from professional investors.
What happens to the remaining 98%? Do they die out? That's where Crowdfunding comes in!
How can a Crowdfunding Campaign benefit a Startup?
1. Crowdfunding is a great alternative way to fund a venture, and it can be done without giving up equity or accumulating debt.
2. Starting up a company is a very risky and challenging journey. Launching a crowdfunding campaign hedges these risks and serves as a valuable learning experience. Crowdfunding as it is today allows an entrepreneur to gain market validation and avoid giving up equity before going all out and taking a product concept to market.
3. It serves as a marketing tool. An active crowdfunding campaign is a good way to introduce a venture’s overall mission and vision to the market, as it is a free and easy way to reach numerous channels.
4. It gives proof of concept. Showing investors and convincing yourself that your venture has received sufficient market validation at an early stage is hard. However, crowdfunding makes this possible.
5. It allows crowdsourcing of brainstorming. One of the biggest challenges for small businesses and entrepreneurs is to be able to cover all the holes that a venture might have at an early stage. By having a crowdfunding campaign, the entrepreneur has the ability to engage the crowd and receive comments, feedback, and ideas.
6. It introduces prospective loyal customers. People who view the entrepreneur’s campaign and decide to contribute are ones that believe in the success of the company in the long run. In essence, these people are early adopters. Early adopters are very important to every business, as they will help spread the initial word without asking for anything in return. Such people care about the venture’s brand and message, and are likely to be loyal customers throughout the life of it.
7. It’s easier than traditional applications. Applying for a loan or pursuing other capital investments are two of the most painful processes that every entrepreneur has to go through, especially during the early stages of the company.
8. It’s free PR. The momentum created by successful crowdfunding campaigns attracts potential investment from traditional channels and attention from media outlets.
Success stories make for interesting reading, and reporters are always hungry for them.
9. It provides the opportunity of pre-selling. Launching a crowdfunding campaign gives an entrepreneur the ability to pre-sell a product or concept that they haven’t yet taken to market. This is a good way to gauge user reaction and analyze the market in order to decide whether to pursue or pivot on a given concept.
