Background
We’re at a point now where the crowdfunding industry is growing by billions of dollars each year. We’re seeing more companies and organizations turn to crowdfunding for their project needs. There can be many faults we find with the more existing approaches such as struggles early on to get bank loans or more traditional funding. I will try to explain some advantages we overlook when we think in crowdfunding. There is sometimes a misconception in the thought process that crowdfunding is just an easy way to get funding that does need to be paid back. With crowdfunding campaigns we can do so much more.
Advantages to consider
1. Raising money with low risk, very little investment up front in most cases. No loans to repay and creditors to deal with, except of course you must honour your backers and fulfill your promises made.
2. Effective way of marketing yourself and promotions. Many connections can be made and networks established where you can further promote your project. This should all be underdone before any kind of campaign is started. Especially when considering which niche related to your project to target.
3. Important feedback is gathered when first discussing the project and the public can validate your idea. For example if we think of a product innovator, in the pre-campaign process you may get valuable guidance and ideas on how to improve your product. You also can get experts to chime on how your campaign page or website should look like.
4. If you end up getting many backers, this could be your loyal userbase which you could count on in the future. They can also promote your project or cause within their circles and provide valuable reviews.
Summary
That’s an overview on what you could do with Crowdfunding, in terms of it’s effectiveness and some notable advantages. If you even take it a step further, by running your own crowdfunding website there are even more benefits. Such as cutting down on high fees from some of the existing platforms, creating an unique experience with a more personal website and collecting funds immediately. For a more detailed explanation this article can be referenced.