crowdfunding lets entrepreneur access capital

How to raise money to execute a great business idea and succeed

Have you ever thought about starting a business, but your idea required a lot of money? Asking for a bank loan is risky because if you don’t pay back, then you may face a serious debt.

Raising money is one of the hardest tasks an entrepreneur must face. It could be a pain in the neck for some. But thanks to the internet, there are new ways of doing this handling less risk.

Technologies have helped to lower the bar of entry for small businesses.


What is crowdfunding?

Crowdfunding is a method that allows entrepreneurs to get funds for their projects (and a way to market their products as well).

crowdfunding lets entrepreneur access capital
Crowdfunding is a low-risk funding method. One way to fuel up your startup.

This method consists of a campaign that has a duration (of a month or more). This campaign has a funding goal, which is the amount of money the startup needs to make their project come to life. And also, there’s a prizes list, which depending on how much money a person puts, the prize they will get. Of course, the more money they put the bigger the prize.


What if the crowdfunding campaign fails to reach its goal?

The campaign can fail to reach this funding goal, and depending on the platform, the consequences may vary. Kickstarter cancels the investors’ payments, so the campaign actually doesn’t get anything. But Indiegogo is more flexible about this, letting the entrepreneurs get the money even if the amount is way lower than the original goal.

Campaigns can also fail after they reach their goal of not being able to deliver the prizes people paid for. There is no kind of punishment for this, besides bad press for the startup and its owners. This helps the entrepreneurs to lower the risk they take making it more attractive to start a project.


Benefits from making a campaign before selling

Also, risk decreases since you don’t need to start producing to see if people will like the product. This is one of the newest ways of making business. We actually communicate the prototype and see if people are interested. Once we know if they are, then we start making it and selling it. That’s the smartest way to go.

You can see tons of successful campaigns, and best of all it is a great way to get exposure for your small company.

You should also promote your campaign on your social media accounts and website. This is the smartest way to get funded faster. Great funding campaigns display Youtube videos, clear descriptions, appealing prizes and they inspire confidence. If you ever want to start a campaign, consider all of this and also go see some other campaigns and learn from them.

Getting funding has been really facilitated by this platforms making it really easy for new-born startups to compete with bigger businesses. If you have any idea or project, you now know how to get the money to make your dream a reality.

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