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.
