Crowdfunding: Arguably the best option for startups

At this moment, you may have just read the article’s title and nodded your head. The guess is you’re a startup entrepreneur who successfully crowdfunded. Otherwise, you simply have the business acumen to understand why and how crowdfunding is so applicable for startups. If you disagree with the title, you’re urged to read on. Several of the best startup practices are embedded in crowdfunding.

Want to know more about crowdfunding? download our free Business Funding Guide.

Crowdfunding is a powerful MVP

Crowdfunding can serve as one of the best minimum-viable products. Is there indeed a market demand for your startup’s product/service? Crowdfunding serves beautifully to help you gather this information. Before your startup is actually ready for business, you can launch a crowdfunding campaign to ascertain if you’re on the right path. Crowdfunding will inform you in a few simple ways. Is your crowdfunding page getting several hits? These metrics can aid in your understanding of the potency of your idea. What kind of feedback is your crowdfunding campaign collecting? This information can help you mold your project with validated learning. What’s the degree of uptake for your perks? The results can assist in evaluating the demand for your business. As a plus, perks create a consumer dynamic that should guide you in developing your pricing model. Perhaps the biggest bonus is that a well-crafted crowdfunding campaign can pump lifeblood into your business. Money.

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Crowdfunding is a startup’s free marketing tool

Crowdfunding platforms invariably take a percentage of whatever funds your campaign raises. This means that they desperately want your campaign to succeed. To help with this, many crowdfunding platforms provide professional marketing advice. They teach you how the pros prepare good marketing campaigns so you can use this for the benefit of your project. Crowdfunding campaigns even go so far as to advertise for you. This happens from social media status updates, to newsletter marketing, and even paid display on ad networks. If you believe in lean startup methodologies, crowdfunding is a strong partner.

Additionally, crowdfunding platforms can help you amass contact information of the people who are interested in your project. Filmmakers have used this advantage to crowdfund part 1 and then part 2 of their projects. You get the gist of it. It’s important to note that crowdfunding totes the most persuasive form of marketing: word-of-mouth.

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Crowdfunding vs. Investors

The next sentence bears no exaggeration. Kiss your pitch deck and business plan goodbye. If done correctly, your crowdfunding campaign can carry most of the information that an investor needs. There is little room in a crowdfunding campaign for misinterpretation. The numbers add up or they don’t. Why talk about investors? Because it’s better to be realistic than romantically optimistic. Crowdfunding has its benefits and played well those can be limitless. However, investors can bring certain things to the table that crowdfunding may not. The message you’ll hear over and over again in business is: weigh all of your options. Back to the point, crowdfunding can grow an initial following and customer base for your business. The next option may be to connect with an investor who can plug your business into the outlets that will spur rapid growth. After a crowdfunding campaign, you’ve got an ace in your pocket. You may find yourself not talking to one, but quite a few investors. This will give you more options and bargaining power. Every little bit counts in getting the right funding for your business.

Interested in crowdfunding? Join other startups at Business Funding Show ’16 and meet the people behind a crowdfunding platform near you!
Eventbrite - The Business Funding Show 2016