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5 Benefits of Crowdfunding

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by Startacus Admin

5 Benefits of CrowdfundingTurn the clock back a decade and the chances are had you uttered the word ‘crowdfunding’ you would have been met with a blank, slightly puzzled stare.

It’s rather telling of the fast-paced digital world that in 2015, crowdfunding has become one of the most popular forms of alternative finance, not only for enterprise but for a massive range of projects, initiatives, and campaigns.

But what exactly is it about crowdfunding that people find so appealing? What is that had launched it (rocket-ship like) from relative obscurity to mainstream popularity within the space of a few short years?

Here are a few of our thoughts on what has made and continues to make crowdfunding a red-hot topic of conversation.

Money Money Money

As laughably obvious as it is, we nonetheless think it’s important to highlight the overriding benefits of crowdfunding is the access it provides to vital funding. Whether it’s seed funding to get your business on its feet, or extra cash to support the future of a charitable project, alternative finance options like crowdfunding have helped to simplify, and make more accessible the process of raising excess funds.

In particular they have managed to challenge the dominance of traditional financial institutions who had gained a reputation of being overly concerned with the rate of financial return they could achieve, especially post the 2008 banking crisis. Crowdfunding has given entrepreneurs, creatives, innovators, and self-starters a viable alternative, which can only be a good thing!

5 Benefits of CrowdfundingIt’s a less risky alternative

Unlike traditional forms of finance which usually require agreeing to repayment schedules, crowdfunding usually doesn’t involve any such agreements. Equity-based crowdfunding allows you to secure capital in exchange for a share of equity in a business, whilst reward based crowdfunding gives you access to funds in exchange for ‘reward’ products or services from the business / project that you are financing

Both of these offer a welcome alternative to the pressure and financial burden of large debt, which can often stifle progress within a business.

It lets you test the viability of your business / project

Crowdfunding success is far from guaranteed, and the very nature of crowdfunding means that it almost becomes part of your market research; an indication of whether or not your project / enterprise will be well received by your target market, or indeed whether it constitutes an attractive proposition to investors.

A failure to crowdfund can be viewed as an opportunity to reassess some of the aspects of your business / project which don't work as well as you like. The beauty of the crowdfunding process means that you can learn from your mistakes and try again.

It can provide great feedback5 Benefits of Crowdfunding

Running a crowdfunding campaign opens us your business to a whole world of both praise and criticism: this is a very good thing. Although it might not feel like it, the constructive criticism which can come from a crowdfunding campaign can ultimately help you to gain a new perspective of what you are trying to do!

The key is to be open to any criticism which comes your way. Too often, entrepreneurs become so close to their projects that they are unable to take an objective perspective on it and, as a result are unable to see flaws which to other are rather obvious. Don’t be defensive, but rather view criticism as a valuable tool to help you make vital improvements.

It’s a great opportunity to promote your project

Whether your campaign is successful or not, it will give you a great opportunity to spread the word about what you are doing, and motivates others to begin and contribute to conversations about it. Of course success in the campaign is the ultimate goal, but it’s important not to undervalue this benefit. Raising awareness of your business / project can motivate others to get involved and help improve it, which is ultimately a great thing.

We offer free crowdfunding publicity!5 Benefits of Crowdfunding

Are you thinking of running a crowdfunding campaign? Startacus offers a free publicity and support package to help spread the word about your campaign!  Check out all the details here!


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Published on: 2nd October 2015

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