In a previous article pertaining to crowdfunding a start-up idea, we talked about how beneficial it is for an entrepreneur to choose crowdfunding to fund his business. But it’s important to be more practical and not always chase rainbows. It is true that crowdfunding is emerging as a great marketing tool and many organisations are tapping into it to have more knowledge and to create brand awareness but before committing to this source, a start-up should understand some important points as to when and which ideas are suitable for crowdfunding.
Crowdfunding platforms ask you to quote an amount that you would want to raise from the platform. You need to be realistic while quoting this amount. If you quote too high an amount and your campaign fails to secure that amount, then you don’t get a single penny from the platform. On the other hand, if you quote an amount that is lower than what you need, you’ll end up facing operational problems in the future.
EXPOSING YOUR IDEA
If your idea is of the nature that it’s viability depends on its uniqueness, then putting this idea to thousands of people will not be a very wise choice as there are many who can copy your idea. You will lose the opportunity of starting early and reaping off the benefits of an untapped industry.
CONSUMER CENTRIC IDEA
Most of the successful crowdfunding programs have this thing in common. An idea is more likely to succeed if it is aimed at consumers and not business. A consumer is ready to invest in an idea from which he would get some satisfaction. An idea that can kindle that inner satisfaction has more chances of securing funds from the masses.
MUST BE SIMPLE
To explain an idea to a large audience of different tastes and understanding is itself a cumbersome task. So it is of uttermost importance that your idea should be simple so as to make the investor understand it easily.
LOW CAPITAL REQUIREMENT
Crowdfunding is not ideal for an idea that requires a large sum of money. It is true that platforms such as Kickstarter have raised over $700 million over the years but they include a very large number of business ideas being funded.
The most important thing to remember is your needs, what suits you and your plan the best should be the ideal source of funding. It can be crowdfunding or be a loan, you must decide it for yourself.