So, you want to get your technology out of the lab but don’t know where to start to look for funding? Maybe you should consider crowdfunding.
Crowdfunding data released by the Crowd Data Center shows the movement is growing at a dramatic pace internationally, with a total of over four million pledges in Q1 totaling more than $351,174,819. The full report is viewable here.
Success stories are increasing as many new companies leverage this funding resource. Just look at Pebble, a wristband with a display that works with iPhone and Android devices to give instant notifications of important calls, emails or other application alerts. The product raised $1 million in just 28 hours on Kickstarter and finished its campaign with more than $10 million, partially because of its hip appearance and great performance. Or consider the Glif, a smartphone holder that works as a stand or tripod attachment to stabilize an iPhone camera when trying to take video or photos. Starting with a goal of just $10,000, the product went on to raise $137,000 using Kickstarter.
And the benefits of crowdfunding go beyond helping you raise funds. It actually provides social proof, so you know that the demand for your product will be there when you’re ready to go to market. It also provides a way to build your brand, as well as to market and publicize your product. If you’re able to get coverage of your crowdfunding campaign by the media, it can draw backers outside your personal network. And, you can engage those supporters to grow your potential audience post-campaign. Make sure to have social media accounts set up before your campaign kicks off so that backers can easily follow you and keep up with developments, even after the campaign ends.
There are a couple of different types of crowdfunding[ii] to consider. One is donation-based funding, in which backers donate via a collaborative goal-based process in return for products, perks or rewards. The second model is investment crowdfunding, where businesses seeking capital sell ownership stakes online in the form of equity or debt. Backers become owners or shareholders and have a potential for financial return, unlike the donation model.
Popular crowdfunding platforms include:
Kickstarter: Of course, this is the original, the one everyone seems to be familiar with.
Fundable: An equity crowdfunding platform, Fundable has some major success stories, such as Owlet, a new wearable tech device to help parents monitor babies, which raised $1.85 million.
Indiegogo: Known for its broad approach and flexibility, Indiegogo is second only to Kickstarter in the donation-based space.
Entrepreneur lists its 10 best crowdfunding sites here. Be aware that most charge a fee of somewhere between five and nine percent of whatever is raised.
If you’re thinking of a crowdfunded campaign for your new product or services, please contact Vision & Execution for ideas about how you could raise funds for your start up.
PR Partner of Vision & Execution and Guest Blogger