Whether you're starting a new business from scratch, looking to expand into a new area or trying to raise money for a project that's important to you, getting funding is often the biggest challenge. For many people, approaching a bank can be a daunting prospect. Moreover, they often aren't interested in smaller scale projects or ones which won't see rapid returns on investments. On top of this, although interest rates look set to stay flat for some time yet, taking out a significant loan often means tying yourself and your business to years of uncertain costs and risks which could cause major problems if you run into issues or obstacles later on.
Never fear though, as with so much in the modern world, the Internet and the sharing economy have got a solution for you: crowdfunding.
Crowdfunding is essentially requesting small-scale support from large numbers of potential enthusiasts in order to obtain the necessary funds. In exchange, you might offer a free limited-edition product or a discount on services once the business is up and running. Crowdfunding offers a number of advantages over more traditional means of trying to secure credit. So, without further ado, let's have a look at them.
Unlike with banks and other financial institutions, the people you deal with aren't calculating risks and eventualities. They genuinely want you to exist. Normally they'll be as enthusiastic about the product as you are and so if you run into difficulties you're more likely to be able to rely on their understanding and patience.
Engaging lots of like-minded people at an early stage of the project is a great way to generate a buzz around your idea. Seeking crowdfunding can get people talking about your business before you've even finished setting up and it's a great way to start building up a customer base which you can rely on. More than that, by getting people to make a monetary (and often emotional) investment in your idea you can guarantee levels of loyalty which are hard to come by from other forms of marketing. You can build on this even further by releasing blog or vlog updates about your progress in order to help maintain and build the hype surrounding your idea.
More Easily Tailored to your Needs
By its very nature, crowdfunding is far easier to tailor to your needs than conventional loans. Problematic terms such as minimum borrowing limits or periods which banks are keen to foist on you aren't likely to be a feature of crowdfunding. Because you're on a more equal footing with your creditors you can . What' more, as we said above, you can repay your debts in kind or by providing service discounts which is far better for you and again gets your product out there being talked.
We hope you've found this basic introduction to crowdfunding helpful. If you want to know how we can help build you a website that's crowfunding compatible (including blogging, vlogging and donate features) then please get in touch so we can talk about your specific needs and aims in more detail.