Crowdfunding for Startups
One of the best things about crowdfunding is that anyone can access funding, but there are also loads of other hidden benefits. If you are looking for money for a startup or for early stage funding for a business, there are many reasons why you should give crowdfunding a go. We’ve listed some of the most important benefits for startups.
OK, so this one is pretty obvious but it’s also really important because it’s likely that if you have a business idea or a new business, you might struggle to access traditional funding routes. This could be for a number of reasons but in most cases banks and investors will need more evidence - business plans, cash flow forecasts, trading history - before they will give you any money. Don’t be fooled into thinking that means that you can only crowdfund a few hundred pounds. Some of our most successful projects are businesses that raised between £10-20k!
Build a customer base
When you’re just starting out you probably don’t have much proof of what customers actually want and market research can be expensive. Crowdfunding allows you to connect directly with potential customers, prove market demand and test price points. You can even pre-sell your product before you’ve actually started production, which is not only fantastic for your cash flow but is also pretty powerful evidence for future investors.
Crowdfunding is pretty hot right now as it’s revolutionising the way people access funding, so it’s the perfect time for you to use your crowdfunding campaign as a selling point and approach the media with your story. You would be surprised by the response, and if you need any help Bloom can give you some contacts. We will also help advise on press releases. Media attention is a big boost for any business, but especially for a new business which is struggling to get the word out.
Often our project owners are offered in-kind support, which means they receive services for free, up to a certain value limit. So you might not make your target, but you could still have valuable support from interested parties who can’t physically give you money. This is also a fantastic way of making contacts who could even be potential business partners, customers or suppliers!
The first important follow up is the fact that you will build an engaged community who want to know about your business, which is a rich source of information that you can (and should!) use long after your campaign ends. Few businesses start with such valuable connections. The other follow up is that you could be contacted by someone who has seen your crowdfunding campaign – this could be anything from a journalist wanting to write a news story to a private investor who wants to invest in your business (which has actually happened!).
So in one swoop, you’ve built a customer base, filled your order book, attracted media attention and proved that there is market demand for your product. Oh, and you’ve probably also got an instant cash injection that you don’t need to pay back. All we can say is you’d be crazy not to give crowdfunding a go!
Image courtesy of freetechnologytutorials.co.uk