What You Need to Know About Creating Successful Crowdfunding
For many, crowdfunding sounds like the perfect answer to address all of your fundraising issues; however, not everyone knows the process and issues that can arise around crowdsourcing financial support. While it can feel like free money, make sure to avoid common issues with these seven factors that can affect the efficacy of your fundraising request.
1.Garner Attention and Build Your Audience
You should be ready and able to begin marketing your efforts well before you begin your request for financial support. This process should begin ahead of time, often several months before.
2. Choose Your Platform Carefully
While there are plenty of platforms that help with crowdsourced fundraising, the choice of platform is particularly important. Not only do you want to ensure that there is a sizable audience, but keep in mind that not all platform services will work for all companies or initiatives.
3. Establish Realistic Expectations
Not only do you need to provide information to the public, but you also need to ensure that the internal expectations and schedule are also correct. Make sure that you have nailed down your timeline and deadlines before you enter into the step to become looking for crowdfunding.
4. Make Sure You Build Trust
For an endeavor like this, trust is a key component. You will need to establish your venture as one that the public can trust. You must make sure that all aspects of your request are truthful and honest, and without this, your request is likely to fail.
5. Develop a Distribution Plan
Once your fundraising efforts for your business, project or initiative launch, you will need a plan on how to deliver on your promise. This means that you will need to project what you need to support your fulfillment and distribution side of the process.
6. Prepare Your Legal Protections
Particularly for proprietary projects or patents, it is critical to have your legal protections in place. Make sure that you avoid complicated copyright, patent, security, etc. risks by consulting a lawyer.
7. Check Your Finances for Compliance
Just like you need to have your legal protections in place, you also need to be sure that you comply with the applicable accounting requirements. If you do not comply there can be significant penalties, so make sure that you enlist the help of a professional accountant who has this experience.
Crowdfunding is often a much more complicated process than many people realize. There are necessary steps to ensure your success and protocols that need to be followed. While crowdsourcing funding can be useful for some ventures, make sure that you invest the time, energy, and effort necessary to ensure that your fundraising efforts are a success.