Is Crowdfunding Right For Your Project? Five Things To Know

November 2, 2022
Photo by RODNAE Productions from Pexels

Thanks to the Internet, getting funding for a project, whether it is a donation project helping out those in need or a brilliant new company idea, no longer depends on the whims of a few investors. Now, businesses, NGOs, and even individuals can collect money from potential investors and make their goals come true. 

Crowdfunding platform software has democratized the financial world and made it possible to get a project off the ground without going through traditional gatekeepers, but it isn’t right for everyone. Here are some things to know before launching into crowdfunding.

1. How Much Money Do You Need?

The most important thing you need to know before launching into any pursuit of investments, including crowdfunding, is how much money you need. Potential investors, including small donors to a crowdfunding campaign, want to know if your goals are realistic or if you are just trying to scam people out of their money. Donors to crowdfunding campaigns also like to feel as if they are contributing to a successful campaign, so seeing that their donation brings you closer to a goal is satisfying.

Examining how much money you need can also help you evaluate if crowdfunding is right for you. If you need large sums of money, it might be hard to get that through crowdfunding. Try to look for other investors whose funds you can combine with money raised through crowdfunding.

2. What Is Your Story?

Storytelling is important when pursuing any investment opportunity. Investors need to be persuaded emotionally that your project is the right one out of all the others. 

Storytelling is even more important on the Internet when you are competing for attention among hundreds if not thousands of other people trying to crowdfund in similar niches. You need to craft a compelling story about the vision you are working toward or why you need the money, which will attract attention.

3. Do You Have a Community, or Are You Looking to Build One?

More than any other form of fundraising, crowdfunding will only be successful if you have the power of an active, supportive community right beside you. Examine the community you have right now through word-of-mouth or online platforms such as social media. This can help you gauge how realistic it will be that you meet your crowdfunding goals.

Crowdfunding is also a way of building your community. By sharing your fundraiser, you might attract new people that are interested in your goals as well who will stick around after donating to boost your work.

4. Do You Have the Capacity to Run a Crowdfunding Campaign?

Crowdfunding may seem easier than chasing other forms of funding, such as applying for projects or chasing down aloof investors, but it still requires a lot of work. You need to put together the crowdfunding campaign, including your hook, story, and potential rewards for backers.

You also need to create a plan for promoting the campaign and responding to potential backers. Make sure you have the time and resources to do so before launching.

5. Which Crowdfunding Platform Software Is Right for You?

Finally, make sure that you have the right platform in mind for your crowdfunding project. Many platforms have different purposes—some are for charitable donations, others are for investing in new start-ups, while still others meet the art niche. Choose the right crowdfunding platform software for your niche, audience, and technical knowledge.

Crowdfunding is potentially a lucrative way to get your idea off the ground, as long as you make sure it is right for you.

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