Vic Di Criscio says crowdfunding is gaining popularity among entrepreneurs. As a means of financing businesses when starting up a new venture. The method uses the power of the internet. To approach people for money to start up a small business, and it is an inexpensive way of funding based on some fledgling idea. Crowdfunding opens a channel for promoting a company’s products or services across the internet. Especially social media, and build a customer base.
How to set up a crowdfunding campaign?
To set up a crowdfunding campaign, entrepreneurs must create a business profile for the business, service, or project on a crowdfunding platform set a goal for funding, and publish the request online. People who take an interest in the appeal for funds can come forward and offer cash donations to the cause, often in exchange for company equity or rewards that are part of the company’s assets. The outreach increases through sharing the link. Which generates more interest and paves the way for the inflow of more funds.
Benefits of crowdfunding
The most perceivable benefit of crowdfunding is garnering funds for the business. When the requirement is not too large, as you can understand from the manner of raising funds through donations. The added benefit is that the approach helps in business promotion. And marketing also as word of mouth keeps spreading about the product or service. Entrepreneurs find crowdfunding attractive because it is a very inexpensive way of funding business start-ups. Which could otherwise be difficult to fund with traditional financing options.
Entrepreneurs need not toil at all as it does not require attending events to garner support for the business. Just by registering with the crowdfunding platform. You can reach out to a broader group of investors. Who could be willing to put in their money for your business. It is an extended form of approaching your family and friends for starting a business. But without the usual reluctance of seeking help, which some entrepreneurs might find embarrassing. The approach is much like developing social networks within your known circle of family and friends, which then keeps expanding.
Women find more favor in crowdfunding
Female entrepreneurs enjoy a higher rate of success in crowdfunding as compared. To the male entrepreneurs, as revealed in a survey. The report from Price Waterhouse Coopers states that women entrepreneurs. Have a much higher likelihood of succeeding in the crowdfunding venture to reach their financial goals. The study says that the success rate for women is 32% higher than for men.
The reason is that crowdfunding breaks the barriers of traditional business financing dominated. By males because it introduces entrepreneurs to non-conventional investors who are different from venture capitalist firms. Which is an exclusively male domain.
Another reason is that women use a more personal tone when they pitch. For funds that help to connect at an emotional level. In contrast, men often stay tied to a more formal approach, which is more businesslike and filled with business jargon.
However, crowdfunding does not assure the funds. You are likely to receive, and in the worst case, you could even come back empty-handed.