According to some estimates, Crowd-Funding grew 200% in 2015 & 150% in 2015. It’s expected to pass VC & Angels in 2016
CrowdFunding Topics: Comparison to other Funding, Advantages, Faster, Fan Base, XX for Marketing, World reach.
The explosive Growth of Crowd-Funding. Your funding struggles could soon become obsolete – regardless of your lack of connections, networks, VCs or angels in your corner to get your startup off the ground. According to Mass-Solution’s CrowdFunding Industry Report, crowd-funding is posed to surpass Venture Capital [VC] funding by the end of 2016. As of 2015, global crowd-funding already had reached $34 billion.
- The best Solution? That’s good news for anyone looking to take a company to the next level quickly, without the tedious process of getting traditional funding – Angels or VCs. But what kind of impact could crowd-funding really have on your company?
- a) Getting Angel-Funding is a difficult, time-consuming process that can take months to secure & finalize. It’s not uncommon to receive an initial seed investment of about $25,000, depending on your business and the Angel investors involved. That probably won’t get you too far – when it comes to building & scaling a business from scratch, though.
- b) a Business Loan can be equally daunting -, with applicants frequently facing high interest rates and plenty of rejections. The Lending industry is in a process of change – as sites like Lending Club offer alternative options for people looking to fund personal projects & small startups.
- c) Venture Capital Funds are sitting on massive funds & are still doing deals, but their energies are focused on re-investing in portfolio companies & startups with outstand track records. As a result, it has never been harder for the early stage pure startup to get funded. You can waste a lot of time & energy trying to do this. Here’s a look at the good ways crowd-funding is affecting the future of startups, and how to succeed at snagging your funding.
2. Impack of Crowd-Funding? It’s taken the Startup world by storm – as it connected everyday people with companies trying to bring (usually) a technical product or service to market.
3. What is the primary “advantage” of Crowd-Funding? It offers instant feedback of the “viability” of your product.
a) Do they like it? Entrepreneurs often get carried away with their business ideas and sink money into equipment, beta testing & expensive prototypes – before they truly understand the market demand. Crowd-funding offers an opportunity to find out exactly what your core audience thinks before you waste your time & $$$. You’ll probably may end up adjusting your business and creating something even better – with a stronger Unique Selling Proposition.
b) Conveying your Concept. Drawing up some simple sketches or putting together a design, working on compelling copy and offering your crowd-funders some great incentives – like free products, perks and/or shout-outs [personal or group thank you’s] are free. Meanwhile, the feedback your audience gives you on your business and it’s model is invaluable. You may find your business has no real traction or has some serious flaws. Your ego might take a bruising, but you’ve just saved yourself thousands of dollars and countless wasted hours.
4. CrowdFunding has prompted “lightning-fast” Startup funding. Your company could raise from a few thousand to a few million — in a matter of weeks. According to crowd-funder IndieGogo , the average length of a CF campaign is between 30 & 45 days. While it’s not the norm for businesses to raise millions on platforms like KickStarter & IndieGogo, it’s still possible. Take a look at Pebble Time. The SmartWatch maker raised $20M and reached a staggering 4000 % of its goal. Whether that’s an anomaly or not, those kinds of figures don’t come from traditional funding. Time to get excited about it !!!
5. Crowd-Funding helps you build a Fan (& maybe even a Fanatic) base. A VC or Angel investor might be rooting for your business to succeed when he or she extends funding to you, but ask yourself, who else is? You haven’t really scratched the surface on building a loyal fan base or following. Crowd-funding can quickly accelerate that process and connect you with an eager fan base ready to “fund” your business and spread the word. Ifyour business or product is something cool people really want to share [like a cool app] trendy gadget or anything people want to give their money for and be proud to own it + brag about it – you’ve something great.
6. Crowd-Funding multiplies your Marketing efforts. The benefit to trying to market yourself, is that all Funders want to see that you have a “following” (fan base) and a demand in the marketplace. There’s a direct correlation to how much your funding increases — or how quickly that happens — based on how well you market your crowd-funding. According to Fundable, social media is a critical component in crowd-funding success. For instance, your probability for success increases to 40 % – if your number of Facebook friends increases by 1,000.
7. Crowd-Funding helps you reach a World-wide audience. Your time & resources are limited when raising funding. With normal funding channels, it’s unlikely that you’ll get to pitch banks and investors from around the world to raise some serious capital for your startup. That’s not the case with crowd-funding. According to IndieGogo, its global platform reaches 224 countries around the world. You could end up with a diverse crowd of funders who can provide more data on what each region wants and how your product or service could impact different parts of the world. With the right crowd-funding campaign, your company could go global before you even go public. Could you tolerate that? [LoL, Wiz4biz]
Comments: What has been your experience of Crowd-funding?
from Entrepreneur.com 18 July 16 enhanced by Peter/CXO Wiz4biz