The age-old question for many startups is “how are we going to raise money?”. In today’s day and age, Crowdfunding helps answer this question. For startups that have a particular product or invention that is not yet released to the public, this could be the best avenue to take.
Benefits of using Crowdfunding for your startup
You could waste months of your time begging for money from investors and other VC’s, and be pitching your idea to everyone in the neighborhood. Or instead, you could use Crowdfunding. This method serves as a more beneficial way to get your product into the hands of the consumer. Below is a list of advantages that Crowdfunding has to offer.
Market testing: Your product can be tested in a real-life environment. You can see how people will react to the product, as well as test your own marketing skills. Rather than an individual recognizing the potential of your product reaching the market, you can see if your market actually likes the product you present.
Presales: Crowdfunding can generate all of the presales needed to get the product on the shelf. Using a rewards-based campaign, you can offer your product at a discount to the first backers that donate.
Less risk: Along with the presale benefits are fewer risks. Using the Crowdfunding model you can receive the money and customers before mass producing a product that you hope to sell.
Reach: If you are successful with your Crowdfunding campaign, you will have reached your target market, and can further use the information to market to a new group of individuals who have the same attributes to those who have already donated to your campaign. Your site will already be running and ready to peruse the market further.
As you can tell, there are many benefits to starting a Crowdfunding campaign rather than using the traditional methods of funding. Of course, there is no guarantee that your campaign will be successful. The best piece of advice that one could take after deciding to run a Crowdfunding campaign is to do as much research as possible.