What are the benefits and drawbacks to crowdfunding?

CrowdFunding

What are the benefits and drawbacks

to CrowdFunding?

FAQ

The benefits to CrowdFunding are many

CrowdFunding, however, does not replace traditional methods of raising

funds but it is a new way to source funding for your idea

1. Market Validation

In many respects CrowdFunding is a great way to test if the ‘crowd’ likes

and supports your idea

You will be able to use the crowd

as focus groups for feedback, tap into their knowledge and advice,appeal to their circle of influence for

additional support

You can also use the support of your ‘crowd’ as social proof to

gain more publicity attract a larger following

apply for other types of funding

2. Limited Financial Risk

Most CrowdFunding websites do not charge you an upfront fee to profile

your campaign

Most websites charge a fee only if your campaign gets funded

3. It is very cost effective

The creative elements of a campaign such as writing up your story,

taking photos, and creating a video require little capital outlay

but do require time

4. You Keep Control

You do not need to compromise on any aspect of your project as you

maintain control over creative vision, costs, product delivery, marketing

and investor expectations

5. You Retain Ownership

Excluding Equity based CrowdFunding campaigns you retain total ownership

of your idea or business

You also get to retain all the profits your idea or business makes

6. Gain Brand Advocates

As your CrowdFunding campaign gains momentum some of your

supporters will want to be directly involved in helping you succeed

Drawbacks to CrowdFunding

Managing a CrowdFunding campaign does require

time, effort, energy and money in order to succeed

1. Time

You are on call 24/7 when you manage a CrowdFunding campaign

You will need lots of time to promote your campaign and answer questions

2. Social Media

You will need to master many aspects of Social Media before you launch

Communication with your supporters needs to come directly from you

as the project creator

3. Campaign Length

A typical campaign can require 2 months of planning, 1 month for the campaign and another for follow-up

That’s 120 days of time and effort you need to set aside to succeed

4. Shortage of valuable information

There is a lot of top-line information about CrowdFunding online

But there are very few online resources where you can get all of your

CrowdFunding questions answered

5. Visibilty and Privacy

To be successful at CrowdFunding you must be prepared for

full personal online exposure

You need to do this in order to build trust with your supporters

6. CrowdFunding is not yet a household term

You will have to spend a lot of time explaining what CrowdFunding

is all about and setting expectations

Less than 50% of CrowdFunding Campaigns succeed but

being aware of the pros and cons before you start will help you get the

results you are looking for

There are many more resources available to support your CrowdFunding efforts at

CrowdFundingFocus.com

CrowdFundingFOCUS