What is the Reality of Crowdfunding?
I am frequently asked about crowdfunding as a way to finance a new product. The reality of crowdfunding is a very complicated topic and would take much more than a blog post to adequately explain. It CAN be a useful tool, but like all things, there are conditions. So in an attempt to give an abbreviated run down of critical elements, I’m going to talk about the two I think are the most important to know up front.
The Reality of Crowdfunding- Critical Elements
Reality of Crowdfunding Element 1: THERE IS NO SUCH THING AS FREE MONEY!
A good campaign will cost money to launch and money to complete.
Reality of Crowdfunding Element 2: It IS REALLY HARD WORK!
Running a good campaign is a full time job. It will take dedicated time leading up to the campaign, through the duration of the campaign, then following up after the campaign.
So if you can keep those two things always at the forefront of your planning, then “YES”. Crowdfunding does have the potential to be a real game changer in the world of financing a project.
Types of Crowdfunding
There are two main types of crowdfunding: perks based and equity based. Both have different legal and financial obligations. Make sure you take the time to understand the benefits and obligations before deciding which will suit your needs the best.
Crowdfunding as a Useful Tool
The best way to use Crowdfunding is as a presale tool for assessing the consumer interest in your product. Setting up a good Crowdfunding campaign takes several months. Take the time to learn the skill set required. You can join (it’s free) Colorado Crowdfunding Meetup to access all of the information you need to launch a good campaign. Colorado Crowdfunding Meetup
So in my opinion, the reality of Crowdfunding can be summarized as useful with conditions.
It has become a very hot topic of late and I can definitely offer you some more in depth information if you want to know more. Please email me if the reality of crowdfunding is something you want more information about!
Also, please check out the following company if you’re looking for a way to fund a great idea and get it to market. Archimedes’ Offspring