Crowdfunding for Small Businesses
Although the concept of donating has been a long standing tradition in society for centuries, the concept of crowdfunding is relatively different. It is not charity. Crowdfunding differs because it asks a large number of people to donate money towards projects hosted by entities such as small businesses or entrepreneurs, and in return, those individuals receive some sort of stake within that project.
For the most part, crowdfunding is done via the Internet. Sites such as Kickstarter.com and Indiegogo.com offer users easy to follow guides to implement their own crowdfunding sites for donations.
Just as most anything that raises money for a cause, there are definite pros and consto crowdfunding for your small business. Here are a few examples that could either help or hinder you:
- Ease of Use: Setting up a crowdfunding site is easy! Once a profile is created, small businesses are positioned to receive funds for their ideas or projects.
- Keep your creativity intact: Small businesses with unconventional proposals can bypass having to redefine their vision to appease investors.
- Less Capital Investment: With so many potential investors at your fingertips, small businesses would be able to shift their funds to developing their projects.
- Theft of Ideas: With publicizing your new ventures out into the world, there is a risk of someone stealing your concept. Sites such as Indiegogo, do not protect your ideas from being copied or stolen.
- Cutting Out Fine Tuning: Although crowdfunding offers a great avenue for small businesses to keep their creativity intact, the development phase and working with discerning investors could be something of value; especially if your original idea needs a bit of fine tuning.
- Unrealistic Expectations: It should be noted that although setting up a crowdfunding campaign may seem easy, it still takes a considerable amount of work to promote it. There is also a risk that no one will actually invest in your project.
Crowdfunding is a great way for small businesses and entrepreneurs to get the ball rolling with their ideas. Have you had success or failures with a crowdfunding campaign? Let us know in the comments below!
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Three Girls Media, Inc. is a public relations and social media management agency with teams in Silicon Valley and the Seattle area. We love working with small and emerging companies across the nation to raise their brand awareness and name recognition. We offer a complimentary 30-minute phone consultation with our CEO and can answer your questions and discuss your specific marketing needs. Contact us today to arrange yours!Written by Erika Taylor Montgomery
Tags: crowdfunding, small business