September 10, 2013
Connecting across the globe is simpler than ever before. Sometimes, all it takes is the tap of a finger. As a small business owner, that means finding customers, investors, and opportunities is simpler than ever before, too. Innovative companies are using the Web’s far-reaching connections to their advantage with a new kind of investment opportunity: crowdfunding. In a crowdfunding campaign, communities can come together across the globe to fund a project, whether it’s for charity, an invention, an artistic endeavor, or something more.
Let’s say you’re ready to create your first crowdfunding project. You’ve already got an active following on social networks, and your website traffic is buzzing. Why not host a crowdfunding effort on your website? Actually, there are several disadvantages to hosting your crowdfunding efforts in your own digital space. And they can all keep your first project from getting the exposure and financial support it needs.
Leading the Crowd
As an entrepreneur, you’re used to doing things your way — and doing them well. That’s why you know how important it is to manage your online presence. Lots of small businesses use their websites to keep in touch with their customers through updates and social media in a way that’s personal, friendly, and genuine. It may be tempting to use this digital space to host your crowdfunding efforts. After all, that’s where your fans are, right?
The answer might surprise you. If you place crowdfunding on your site, you might see a decline in visits — even return visits. Why? It’s simple: People might feel that every time they go to your website, you’re asking them to take out their wallet. Of course, you can — and should — use your site to talk about your campaign, drive traffic to your crowdfunding page, and recognize supporters. But you should never risk alienating your customers by putting all your messages in one place.
There’s another problem with this approach: by putting your campaign directly on your website, you’re cutting yourself off from the larger community of people who are already interested in funding the different types of projects you’d have on a professional crowdfunding network. If your blog, Facebook, and Twitter don’t already have loyal followings, it might be difficult to find the support you’re looking for — and the funds you need.
Crowdfunding sites work hard to create safe, social places to raise funds. On top of that, many have established, industry-specific connections to help campaigners go beyond just raising donations.
There are other advantages, too. A professional network comes with a secure payment page, a tried-and-true template, and the possibility of free promotion from a platform’s newsletters or social media. After all, crowdfunding is still a new concept. Some of your fans might not know what crowdfunding is or how it works. In that case, it’s simpler to trust a campaign that’s easy to use, accessible, well-promoted, and hosted on a professional platform.
Of course, there’s a small price to pay for a trusted brand. Most professional crowdfunding platforms take a percentage of a successful campaign, usually no more than 5 percent. Most entrepreneurs feel that’s a fair trade for the help, guidance, and inspiration they receive throughout their campaigns. Of course, you should research which platform fits your goals — financial, social, and otherwise — and decide what’s right for you.
The Right Fit
What should you look for when you’re choosing the right platform for your campaign? Chances are, there’s a niche crowdfunding platform for a business like yours, and it’s loaded with other forward-thinking peers in your industry.
Kickstarter and Indiegogo are the most common platforms, but they might not be the best fit. Niche platforms exist for a reason: to help a specific industry unite and grow together. Here are a few examples of tailored, unique platforms:
- WeDidIt, a fundraising platform for nonprofits that works with each nonprofit to create strategies to help them craft the most successful campaign possible. Crowdrise, Razoo, and GoFundMe are other options for funding a charity or cause.
- Startups get a boost from platforms like Fundable, Bolstr, and EarlyShares, and small businesses can find investors at CircleUp.
- Catincan is used to fund developers who spend time developing new features for open source platforms, and Seed&Spark supports the filmmaking community.
There’s more to a successful crowdfunding campaign than just spreading the word or offering the right rewards. Simple, easy-to-use interfaces make giving easy for your contributors. And when it’s easy to give, it’s easy to find the funds you need, which makes giving your customers the most innovative solutions your business can offer even more gratifying.
Guest author Amanda L. Barbara is Vice President of Pubslush. Pubslush is a global crowdfunding publishing platform for authors to raise funds and gauge their audience for new book ideas and for trendsetting readers to pledge their financial support to bring books to life. Follow Amanda on Twitter!
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