How To Make Crowdfunding Work for You
One of the great social media movements has been the growth of crowdfunding. This innovative solution for raising capital from investors has given individuals with exciting ideas the means of bringing them to fruition. However, when asking others for money for your venture, you have a great deal to prove. Because it is important to make the most of your solicitation efforts, you should understand these guidelines before advancing your ideas.
Choose Your Vehicle Carefully
Kickstarter may be the most well-known funding source; it became a phenomenon when these platforms exploded starting in 2009. However, a number of funding sources populate the internet. Because you may not want to become locked into only one brand, do your research to see whether one will work better for you than another based on the number of viewers at the site and their particular affinity.
Examine Your Values and Vision
Once you have decided on your vehicle, double-check your fit. If you have not thought extensively about where you want to take your idea, form a plan before jumping into crowdfunding. Consider your approach to be akin to that of forming a minimal business plan. You need to earn the faith of potential investors. They need to know your idea is viable and that you can be depended on to do the work necessary to make it a reality. Along those lines, be sure to present attainable timelines for your project, neither unrealistically brief nor frustratingly lengthy.
Guard Your Idea Zealously
Once you put your project out for all to see, you open yourself up to a loss of control. Others may swoop in to grab pieces of your vision or blatantly steal the idea wholesale. Protect yourself by writing nondisclosure agreements that you present privately to potential investors. It may be more challenging to drum up interest this way, but if you do your research and target your focus, your preparation will further demonstrate your professionalism.
Determine Backer Returns
Deciding how much your supporters should receive as part of the agreement can be tricky. You need to make sure the payback is worth the investment for them, but you should not give away the store just to draw them in. Be clear in your guidelines: You should own the majority of the business and you should see enough profits that it remains stable; you certainly need to attain enough cash flow to handle downturns.
Initiating a crowdfunding move can be both stimulating and frightening. To keep your emotional state leaning toward the former, plan carefully before putting your idea up for review.