Crowdfunding is all the rage. Lately, ordinary people made headlines by raising money for various noble and creative causes. But is crowdfunding the right way to get financing for your small business?
Find out from our blog, and how Veem can help.
Crowdfunding – Is It for Me?
Whether crowdfunding is right for you depends on the nature of your business, as well as the lifecycle it’s currently in.
Do you have a brilliant idea for a product/service that would change the world or at least, solve a problem? Is your business in the startup phase and you need funding to open up shop? Do you want to expand your business to reach an amazing goal for the benefit of many?
If yes, then why not give crowdfunding a go? Get out there and explain to people why your idea is the best, how your business is going to help people, and let them know how you’ll use their money.
Get out there and explain to people why your idea is the best, how your business is going to help people, and let them know how you’ll use their money.
On the other hand, well-established businesses without any “sensational” new projects could have a hard time getting enough attention from crowdfunders. If your business is in that stage, you may have a better chance with other channels of funding.
Where to Start?
There are three main types of crowdfunding platforms you can choose from: reward, loan, and equity-based.
Reward-based platforms are the most popular among crowdfunders. You set up a campaign, you collect donations, and in return, you promise some kind of incentive to your donors.
You set up a campaign, you collect donations, and in return, you promise some kind of incentive to your donors.
For example, a discount coupon for your products, or featuring their names on your website. Get creative and think of a reward that will get people to donate to your cause.
Loan-based platforms are an alternative to traditional bank loans. Here, you can ask for peer-to-peer loans from individuals, other businesses, or anybody who believes in your project.
Loan-based crowdfunding is relatively new, compared to the original, reward-based type, which means that there are less platforms available.
Although they may not be strictly considered crowdfunding since their donors are not always “average” people but accredited investors, equity-based platforms are still a viable option for many small businesses.
Websites like AngelList, FundersClub, and CircleUp allow you to look for real investors in your company. Note that this type of crowdfunding usually favors startups, so it may not be a right fit for every small business.
How to Succeed in Crowdfunding
If you’ve chosen your platform, the “only” thing left to do is writing a winning campaign. Here are a few tips on how to achieve that:
- Emphasize the value of your product idea. Show what your product will solve, and let your donors feel good about themselves by contributing to the solution.
- Personalize your campaign. Share your passion with your backers and let them know why your idea is important to you.
- Offer great rewards. Think about creative ways you can include your donors into your product. Making them feel part of your effort will increase their willingness to donate.
- Be direct. Connect with your donors as often as possible and let them know how your campaign progresses.
- Advertize. Share your campaign on all your social media channels, and reach out to thematic blogs to promote your goal. Get the word out to as many people as possible.
Once the money starts flowing in, you can begin working on your idea. Remember to use your funds wisely and eliminate all unnecessary payments. Because why pay for services with no value? Like international wire fees.
Veem charges no wire fees for international transfers, and offers competitive foreign exchange rates. Sending an international transfer through Veem is faster and safer than your bank.
Creating a direct connection between you and your business partners, Veem allows you to send international transfers without hidden costs or unexpected delays.
Sign up for a free Veem account and enjoy international payments of the future.