Article
Crowdfunding is a form of
crowdsourcing and alternative finance that basically involves funding a project
or venture by raising monetary contributions from a large number of people. It
allows entrepreneurs raise capital without giving up too much equity. It has
over the years become an effective alternative for raising funds for business
ideas. Jumia Travel, the leading online travel agency, shares 9 things
entrepreneurs should know about crowdfunding to take full advantage of it.
Plan
It is difficult to plan a
crowdfunding campaign because you don’t know what to expect and can hardly
predict the kind of reaction your campaign might get. Your campaign may or may
not go viral but either way, you should be prepared to handle possible press
attention and to respond to your growing community. You should be able to
manage things immediately as they come up.
Choose
the right platform
Spend time researching on
the different internet-mediated registries or online platforms for
crowdfunding, and choose the one that is right for you. Choose a site that fits
your project and the industry you are in.
Pay
attention to the deal
You should pay attention
to the details of the terms of the platform, the percentage the platform takes
and when you get the money. This is to avoid nasty surprises down the road. Pay
attention to the deal of your crowdfunding platform and find the one you are
comfortable with.
Think
about your messaging
It is easier to raise
money for an idea that touches a lot of people whether or not the venture is
for-profit or not-for-profit. Consider the message of your campaign and think
of how you can make it relevant to as many people in your target group as
possible.
Learn
from others
Check out and analyze
other successful crowdfunding campaigns to see and understand what worked for
them and how you can apply it to your campaign. However, you should be
realistic about how much of what you learn from these campaigns you can apply
to yours, considering your resources. Adapt ideas in a way that fit your
budget, target group and brand.
Be
prepared to tell your story (be transparent)
You need to be authentic
with your campaign and be as transparent as possible. Without these, people are
less likely to respond positively to your campaign, they’ll remain skeptical
and unbelieving. Be as communicative, engaging and as open with your community
as possible, let them know as much as they want to know and have as much
evidence as they need to believe your campaign.
Get
Early adopters
Get friends, family and
people you know to invest right away. This is because people are more likely to
invest when they see others investing and people tend to trust a campaign when
it seems to be doing well. Investors are also likely to develop an interest to
invest when they see your campaign is something the public/community are
interested in and responding positively to.
Have
a strategy for marketing
You need a consistent and
persistent marketing plan that will help you reach far beyond your circles –
asking two or three friends to help you repost or share your campaign isn’t
enough. Research and figure out where to find the people in your target
community and create eye-grabbing, heart-grabbing and convincing social media
posts and ads to grab their attention, generate interest and incite a positive
response to your campaign.
You can also create
genuine relationships with influencers and reach out to as many of them as you
can to support your cause and help you get the word out.
Crowdfunding
can fail very easily
You should be prepared for
this reality. You need to know when to crowdfund and when to approach other
resources. Not all businesses are suited for crowdfunding. However, once you
have considered these and work towards the proper execution of your
crowdfunding campaign, its chances of failure are reduced.
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