Advantages of Crowdfunding Archives

5 Crowdfunding advantages over traditional loans

February 12, 2017February 12, 2017 CustomerHelp Leave a comment

Whether you are a corporate or a non-profit organisation, fundraising is something that you have to go through some time or the other. You need to raise money for either a new venture, a large project, or something else. But you do need to undergo fundraising. Now the two most feasible options for fundraising are – Loans and Crowdfunding. Among these two options, crowdfunding is any day the better choice. There are a lot of crowdfunding advantages which make it better.

Crowdfunding advantages

Loans aren’t being as accessible as they were in the past. Especially if you are applying for a business loan, you need to go through a lot of procedures. And even after all those efforts, you cannot be sure that you will receive the required loan amount. That is why crowdfunding is always the better option. Here are some of the crowdfunding advantages which make it a better choice.

#There are only two prerequisites.

Unlike a bank loan where you need to go through 100 different things, there are only two prerequisites in crowdfunding – A strong idea and strategic marketing. This is the most important of all the crowdfunding advantages over bank loans. A strong idea is going to be the basis around which your entire campaign runs. Thus, you cannot compromise with it. Then you need some planned marketing which will help you spread this idea.

#You have a larger pool to appeal to.

Another great one on the list of crowdfunding advantages is that you have a larger pool to appeal to. You don’t need to worry if one bank or one lender is not convinced with your ideas. You have a much larger group to convince.

#Additional marketing before the launch.

To host a successful crowdfunding campaign, you need to indulge into efficient marketing. This crowdfunding prerequisite also becomes one of the crowdfunding advantages. This is because when you market your crowdfunding campaign, you are in fact promoting the idea of your product or services. Thus, your product will be marketed before its launch and it will directly affect your sales once the product is released. Plus, your backers will also be on the list of your first customers.

#Your backers become your brand ambassadors.

Word of mouth is one of the most powerful marketing tools. And that can come really handy if you have backers and investors with you. Your investors not only just fund your project but also become your brand ambassadors. This becomes one of the most amazing crowdfunding advantages. Since they have invested in your project, they trust you and want your business to grow. Thus, they will try their best to make it popular.

#Lesser repayments required from your side.

From an economical point of view, this is the most crucial of the crowdfunding advantages over bank loans. In the case of loans, the repayment is to be done in the form of principal amount + interest. Now when you compare this amount to the costs of equity, reward or debt-based crowdfunding, you can clearly realize the difference. The latter is always much more economical and thus viable.

Benefits of Crowdfunding – How it changes our life?

January 21, 2016January 21, 2016 CustomerHelp 1 Comment

Crowdfunding, an upcoming and rapidly growing phenomena of raising capital by startups and individuals for their ideas, product prototypes etc. One of the major benefits of crowdfunding is that it is crowd sourced capital and it enables you to showcase your idea to the world in order for people to each invest in your idea or startup.

Benefits of crowdfunding are numerous such as a startup gets to turn its investors into very own loyal customers of the services/products that are being offered which helps in the long run. A few other benefits of crowdfunding are discussed in detail.

Benefits of Crowdfunding – Social Acceptance and Validation:

Crowdfunding gives a massive opportunity for the individual/startup, who is looking forward to raise crowd soured capital, to understand how the target audience or the society reacts to their idea or product and whether it is being accepted by the masses or not. It works as a reality check or a validation point wherein it can be ensured whether the target audience needs such a service or product in the market or not. It gives a fair idea about the longevity of the idea in the near future.

Benefits of Crowdfunding – Ease of Access for Startups:

Unlike other models of raising capital for their startup, crowdfunding is easily accessible by them in order to raise capital around the world from anyone who is interested to invest through various crowdfunding portals. Crowdfunding has basically given the power to all upcoming individuals/startups to raise money from a structure like an IPO but in the electronic form and without the complicating hassle of an actual IPO. It is one of the benefits of crowdfunding that gave startups a pedestal to showcase and raise money from the world.

Benefits of Crowdfunding – Somethings in life are still free:

One of the important benefits of crowdfunding which is enjoyed by startups is it is free. Yes, the startup can easily raise capital without having to pay heavy application or funding fees. Crowdfunding gives an easy way to startup as we all know they bootstrapped on capital and this phenomena gives them a way to save as much money as they can to reach out to their potential investors and raise capital for their ideas.

Not only this, startup also enjoy the benefits of crowdfunding in terms of free marketing and PR. Usually, a startup would have to set aside a separate marketing and PR budget in order to reach out to the target audience to create a buzz, but crowdfunding gives them free marketing in the market along with possibilities to raise capital from investors/customers.

Conclusion

These benefits of crowdfunding put it into a growing concept where it is leaving behind other methods of raising money for startup and becoming a popular one. It has known to grown over a period of past 5 years and the way startup can achieve great benefits of crowdfunding, it seems to have even a brighter future in the coming years. We would love to hear how you think you can attain the benefits of crowdfunding.