For entrepreneurs to raise funds, they ought not to worry if they find it difficult to raise capital, or they lack fund. If the grants from friends or families or even personal savings aren’t enough to start the business, crowdfunding should be the next option.
Crowdfunding is the act of using a small amount of capital from a large number of people to finance a new business venture. It creates an opportunity for entrepreneurs to raise large capital from anyone for investment. Crowdfunding creates a forum for entrepreneurs or small scales to present their ideas to waiting for investors. For successful crowdfunding the following guidelines should be followed:
YOU SHOULD PRESENT AN ATTRACTIVE & CLEAR STORY
One of the things that convince & persuade investors is your ability to touch them deep inside, make them feel you. If your story attracts people, they would surely give you money. You should be able to present your ideas clearly and express yourself in the right manner. Tell them what you want to do, why you want to do it, the importance and benefits attached.
YOU SHOULD BE BOLD AND CONFIDENT
When you are talking to people, you should speak with confidence, enthusiasm and boldness. You should be audible enough, acting gibberish in front of the investors will make them lose confidence in you. Talk to the crowd of investors with passion, this will make them want to invest in your business.
SURROUND YOURSELF WITH RELIABLE AND TRUSTWORTHY PEOPLE
Crowdfunding depends on your reputation and reliability. You need a good reputation and a very reliable group of people who would vouch for you no matter what happens. You should have close people that will help you spread your idea. They would be the first to donate, this will motivate other investors who are scared of donating first.
In crowdfunding, after the investors have given you money; in exchange for their money, you will need to offer them a meaningful reward. The reward might be in form of a sample of your product, giving investors advance to your product before it gets to the market or providing them services at a lesser price. Make them feel special, investors should be given a unique and meaningful prerequisite.
Startups would gain lot of benefits from crowdfunding including:
As the saying goes “little drops of water make a mighty ocean”, if the money being collected in bits are added up, the end result yields a huge amount of money. This will enable the business to start well, their products will be standard and be of good quality because the necessary machines needed are available and this will improve the welfare of its customers, this gives the business a good market name.
GOOD MARKET NAME
When a business provides products that are of good quality and are standard, this gives the business a positive image. Amidst competitors, customers will prefer their products due to their good quality. This will lead to increase their profit.
No organization can survive without customers. If an organization produces standard and quality goods, this will make the demand for their products rise leading to more profit.
MORE PROFIT AND BETTER WELFARE
As the customers increase, the profit increases leading to a better standard of living of the customers, employees and the employer, society, and shareholders.