If you are planning to launch your start-up in sometime, you would be wondering about crowdfunding. What is it all about? To be clear and precise, crowdfunding is all about sourcing important funds through the means of other people. It is a kind of collecting donations from a number of people or from special groups and organizations to carry out certain planned activities of a new start-up company. While there are some risks involved in this, the process of collecting funds from a number of sources will be of great help. Here is a look at the importance of crowdfunding for the start-up companies. The Crowdfunding promotion services platforms will help you to pool enough funds for resources and activities. |
One of the most important things for your start-up to click is to have enough traction. This means that there should be enough buzz publicly about all your products and services. This can be done if a large number of parties are throwing in big bucks. Usually, Crowdfunding promotion services begin by certain groups and individuals parting with their donations to fund the business start-up procedure.
The moment your Crowdfunding process clicks, you can expect that press will give it the first page coverage. This means that when certain big people like industrialists will start pooling money into your business ventures, the publicity means that there will be a time when some big venture capital funds eventually contact you so as to help you out. This is also another great accomplishment and it comes mainly from the press publicity and coverage that you would get it from more investors investing in your start-up.
Through random surf around on the Internet, I discovered that there is a growing online trend, the concept of Crowd funding marketing. Perhaps it is not such a new concept as politicians have been doing it for years to raise funds, even charities or entrepreneurs do it. However what is new, at least for me, is that it derives from crowd-sourcing or user generated content, which involves allowing work, or in this case investing, to be outsourced to the masses or particular groups of individuals therefore making crowd-funding one part social network and one part capital accumulation or fund raising. What makes this even more interesting is that it is being used as a business model.
Essentially the model includes many micropayments, done via supporters, or as some entities call them micro-investors, who all donate or invest a small amount into a concept or product which will eventually, pay off if enough people provide the determined amount. If the determined amount is not reached there is no payoff to anyone which can make it a bit of a gamble. Should the amount be reached all the investors are rewarded in some manner, either in a cut of the total future sales or provided with goods or services exceeding their initial payment? Crowd funding marketing entities seek to harness the enthusiasm as well as the cash of strangers, usually from the Internet, by promising them a cut of the returns (the incentive) which, in my opinion, is similar to concepts found in gambling where a higher risk equals a higher payoff usually.
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