4 Ways Crowdfunding Can Help Grow your Business

4 Ways Crowdfunding Can Help Grow your Business
4 Ways Crowdfunding Can Help Grow your Business

In their startup stage, businesses struggle with different challenges ranging from raising adequate capital, developing new products, finding public storage and positioning their products in a highly competitive market. With the advent of technology, businesses can now raise capital easily through crowdfunding. But that’s not all that this new phenomena has to offer. Through crowdfunding, you can grow your business from scratch within a short time in the following ways:

1. It’s a more efficient way of raising funds

If you are running an early-stage business where you need to focus more on building it and attracting seed capital, you may find it difficult to get the time and dedicate your attention to pursuing conventional methods of raising capital. Instead of completing loan applications or trying to locate accredited investors on your own, you can reach potential funders through a centralized location by launching a fundraising campaign on a crowdfunding platform. This strategy might be more effective and efficient in taking your message out to potential investors using videos and enticing reward systems.

2. You get validation and social proof

If you run a highly visible, strong fundraising campaign, you will be able to get the social proof and validation you need to chart your way forward. You get social proof when prospective customers express interest in your product or service. Usually, this demonstrates the confidence that people have in whatever you are doing and more people are likely to follow suit once early adopters validate your products. This social proof can then be converted into traction in terms pre-orders, media attention and number of backers, which is invaluable when you are pitching to investors.

3. You get an opportunity to refine your business idea

When you launch a crowdfunding campaign, you open yourself up for critique and potential backers get to poke holes into your business plan and ask the tough questions. This is a free brainstorming session that allows you to refine your business idea. Considering that the success of any startup depends on how well they identify and satisfy and unmet, it is critical to seize every opportunity you get to receive feedback from customers. Crowdfunding gives you this opportunity to engage with potential customers through complaints, ideas, questions and feedback.

4. It gives you media exposure

Media coverage makes it possible for more people to see your fundraising campaign. This in turn creates a lasting awareness of your startup brand among potential customers and investors. This may be in the form of live streaming, blog, a feature story or publication on a popular media channel. When this happens, it serves as a great platform for attracting backers who are outside your network. A great mention on twitter or in a newspaper or blog feature can have a powerful snowball effect on your business, linking you to major investors who otherwise you would not have reached. Whether such investors learn about your product or service via a popular blog or via an innovative fundraising campaign, running a successful crowdfunding campaign is a great avenue for capturing the interest of new investors.