An overview of crowdfunding and crowdfunding marketing
Business → Marketing & Advertising
- Author Adam Laurie
- Published July 20, 2019
- Word count 793
Crowdfunding in 2019 is fast becoming a legitimate way for start-ups to raise funding to enable them to launch their big ideas and bring their products and services to market. But where did crowdfunding originate from, how did it come to be and what do you need to do to run a successful campaign?
What exactly is Crowdfunding?
Crowdfunding is a new way for many entrepreneurs and small companies to access funding for their projects and ideas. Instead of raising large funds through a single bank or an angel investor, they opt for Crowdfunding. In this model, small businesses and entrepreneurs acquire small amounts of money from many different people, as opposed to traditional ways mentioned earlier.
Crowdfunding isn’t a new concept and can be traced back many hundreds of years in several different fields, most notably for ‘old times’ writers trying to get funding to launch their books. However, the beginning of online crowdfunding is claimed by ArtistShare. Launched in 2003, this online platform was the space where music fans could gather to fund artists and help them launch their art to the world.
Where does exactly Crowdfunding happen?
From the launch of ArtistShare, more platforms came to life and nowadays platforms like GoFundMe, Indiegogo and Kickstarter facilitate the financing of ideas, businesses and charitable causes. These platforms serve as point of encounter between those who need funds and the ones willing to invest. On these platforms, it is possible to create campaigns and attract the much desired funding that start-us require to launch.
However, These platforms do not operate for free. Usually, they charge a percentage of the total funds generated for a campaign. Most platforms set a mandatory timeframe for the campaign to reach the investment goal, which generally goes from 30 to 90 days. Some of these crowdfunding platforms operate on flexible funding principle, (Indiegogo), which allows you to keep the money raised independently of having reached the proposed funding target or not. Others like Kickstarter work on the "all or nothing" principle where you either reach the total investment that you proposed or receive nothing if you don’t reach that funding goal.
Who can invest in a project?
Anyone can back or invest in a crowdfunding campaign, however It will mostly depend on who and where you market your campaign. Studies show that around 75% of backers come from the contacts arranged by the crowdfunder who is running the campaign and not people on the crowdfunding platforms. These investors can be family and friends, work colleagues, friends of friends etc and by implementing the correct Crowdfunding Marketing plan it is possible to attract hundreds or thousands of backers and investors to your campaign.
Investors, Backers and Donators all receive something different for their support and investment in a campaign.This depends on the platform in use, the project, and the type of crowdfudning campaign.
There are 4 different types of Crowdfunding:
• Peer-to-peer
• Rewards-based
• Equity-based
• Donation-based
Peer-to-peer
This system is similar to a bank loan, however is funded by a crowd of Investors. A start-up will take out a loan and pay back the loan plus interest over a set amount of time. The investors make a return on their initial investment.
Rewards-based
A backer will receive a reward for their pledge. Depending on the total money invested this can range from a simple thank you card to priority access to the finished product once it is produced.
Equity-based
Equity-based crowdfunding gives a slice of equity in the company to the investor in return for the investment made. Think of this method as being somewhat similar to buying stocks from a company. If the company gets more valuable in time, so does your investment in it.
Donation-based
As the name indicates, this system doesn’t produce a return on investment, apart from the satisfaction of contributing to a charitable cause or helping someone. It is mostly used to support charitable and non-profit causes.
How to promote your campaign
To create a compelling campaign that attracts enough backers and brings your desired investment you will have to put some serious effort into Crowdfunding marketing. If you want to grab the attention of backers, your marketing effort will have to focus on creating an effective pitch, produce great imagery and a great video campaign and the building of a crowd of backers to support you. This may seem a bit too much to do, but luckily there are now companies who specialise in Crowdfunding marketing that can help you achieve your goals. And before you think about saving some pounds by producing your own video or writing your own campaign copy, keep in mind that the professional touch in the presentation and communication can make the difference between getting the much desired investment or not.
Wow Your Crowd is a crowdfunding marketing agency that can take your product, service, or idea, and promote it to ensure that you get the backing that you need to launch your start-up business.
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- Revolutionizing Marketing
- The Top Ways to Use PLR Content Effectively for Your Business
- In-Depth Look at How Commercial Video Production Works
- What Role Do Video Production Services Play in Building Customer Trust?
- Roof Repair vs. Roof Replacement: What’s Right for Your NJ Home?
- Why authenticity is key to social media success
- Why Working with a Certified Financial Advisor Makes Financial Sense?
- How To Harness Social Media And Digital Marketing To Promote Drink Sales
- The Ultimate 30-Step Guide to Growing Your Online Business
- Refer-a-Friend: How to Earn Easy Rewards on a Promo Codes Website
- The Smart Guide to SEO Success in 2025: What’s Actually Working
- 8 Best Ways to Promote Your Fiverr Gig & Boost Sales
- Top Web Development Trends Every Business Must Watch in 2025
- Why You Need A Fractional CMO
- 10 Easy Tips for Effective Content Marketing
- Canadian Business Email Database List – Unlock Endless Opportunities in Canada
- The Unified Data Advantage: Unlocking Marketing ROI and Business Growth
- Basic Sales Techniques to Increase Sales on Your Website or In Person
- Tips for Effective Amazon PPC Management in 2025
- Snapchat Launches AI-Powered Lenses
- The Future of Public Relations: Comprehensive PR Trends and Predictions for 2025
- From Zero to $10k/Month: Monetizing Your Online Directory at Every Traffic Milestone
- Effective SEO Strategies for Marketplaces
- Why Choose a Professional Web Design Company in Sri Lanka?
- From Leads to Customers: Proven Strategies for Small Businesses to Boost Conversions
- How to Generate High-Quality B2B SaaS Leads in 2025
- Why Local Businesses Are Choosing to go Local for Web Design
- What Does SEO Mean in Writing? A Marketer’s Blueprint for Success
- Marketing Challenges for Retailers: Navigating a Complex Landscape
- What is AI Marketing? A Game-Changer for Modern Marketing Strategies