This blog article will explore how you can use crowdfunding to launch your business idea or project. Before we delve into the nitty gritty of crowdfunding, let’s understand what it means. According to Wikipedia, Crowdfunding is the practice of funding a project or venture by raising money from a large number of people, typically via the internet. Crowdfunding is a form of crowdsourcing and alternative finance.
Crowdfunding is a donation revenue model.
Even when crowdfunding is closely connected or said to be done with the internet, many African entrepreneurs have utilized this strategy long ago. Remember that your grandmother’s Osusu groups? It is very similar. The difference here is that you do not expect to get your money back as the donor, nor do you pay the money back as the receptor.
In 2015, over US$34 billion was raised worldwide by crowdfunding.
Wikipedia
For crowdfunding to happen, there has to be a reason to donate. Reasons can be either personal or entrepreneurial. Say you want to start an art project like releasing a music single. You need financial support. What you can do it to find a suitable crowdfunding platform and create a project profile. Afterwards, you will promote the profile to people who might donate. People donate because they want to support and believe in your proposed project.
They contribute if the perks are attractive.
Are your perks attractive?
What are crowdfunding perks?
Perks are the reward you get for donating. The perk model has diversified from traditional reward-based to equity perks over the years. Some say debt perks are a type of reward under crowdfunding, but if you have to pay back in cash and maybe with low interest, it is not crowdfunding anymore, but crowd investment. These two are very different, so you should be cautious. In another article, we will explore crowd investing. Get our Joadre tribe app to stay notified when we release this article.
A classic reward-based perk you can offer is a free download link for the new music album you released (this is if the music is sold). If the piece is to be published for free listening, like on Youtube or Spotify, you should create more exciting perks for your crowd, like merchandise. Merch includes branded products such as unique edition T-shirts, mugs, exclusive signed albums and such.
Go a significant step further to offer creative perks like a private concert, crowd funders exclusive premiere and such. Also, end credits in products, especially digital media products, are attractive for many to donate. Remember, though, that these platforms take a percentage for their services. Be sure to check all the fine prints. Some might only let you cash out if you reach your intended goal. Now allows us to take a quick look at some crowdfunding platforms.
Top 9 List of crowdfunding platform six software
- Kickstarter
- Indiegogo
- Crowdsupply
- Mightycause
- GoFundme
- Patreon
- GiveForward
- Startnext
- Crowdfunder
- FundRazr
Crowdfunding platforms & software
There are over 1000 (yes, one thousand) crowdfunding platforms to choose from, depending on what you want. We have checked out a few, and here is what we think. Not all of them are purely crowdfunding. Many are crowd investments and the like, be cautious. Here are our top 10 platforms and software.
Kickstarter: It’s where creators share new visions for creative work with the communities that will come together to fund them.
Indiegogo: The community has helped bring more than 800,000 innovative ideas to life. From live campaigns to ready-to-ship tech, curious humans rely on Indiegogo to find the latest innovations in tech and design.
Crowdsupply: Our mission is to bring original, useful, respectful hardware to life. We help creators launch with the funding and support (mentorship-like) they need to deliver thoughtfully crafted products to delighted backers.
Mightycause: Mightycause is online fundraising software for empowering nonprofits, people, and the causes they believe in.
GoFundme: At GoFundMe, we empower individuals and charities to turn compassion into action. Because that is how change happens.
Patreon: Patreon powers membership businesses for creators by giving them the tools they need to acquire, manage and energize their paying patrons.
GiveForward: It was an online fundraising tool designed to help people raise money for the causes and organizations that they care about.
Startnext: Start Next is the largest crowdfunding community for creative and sustainable ideas, projects and startups in German-speaking countries.
Crowdfunder: Connect projects that matter with people who care.
FundRazr – A free crowdfunding and online fundraising platform released in 2009.
Your best strategy
- Prepare a pitch like you want to pitch your idea to a bank or investor.
- Have all your write-up ready.
- Find the platform that works best for your target audience, the region, the currency accepted, the terms etc.
- Be sure you can develop the project based on the minimum amount you set to receive.
- Design your perks before you launch a crowdfunding campaign.
- Launch your crowdfunding campaign.
Remember, apart from the money you raise, one great advantage of crowdfunding is that you get to test the acceptance of your product/idea and have already started marketing your product or idea. Can you go for it as an African entrepreneur? Yes, absolutely. So no cash is not an excuse anymore!
Click to find more content on funding at Joadre platform.
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Cheers
Joadre
