The world of crowdfunding continues to grow in popularity. According to the World Bank, global crowdfunding activity is projected to reach $120 billion by 2020. This means that more and more projects are being funded by everyday people – not just venture capitalists or angel investors. Crowdfunding has become a game-changing opportunity for entrepreneurs, startups, NGOs, and individuals looking for funding for their ideas and ventures. Over $1 billion has been raised on online platforms by Nigerians this year alone. But as the competition gets fiercer, how can you set your project apart from the rest? Fortunately, there are many practical ways you can use crowdfunding effectively to finance your business idea or venture check out these tips.
Define your objectives
Before moving forward with any crowdfunding campaign, make sure you know what you want to achieve. For example, do you want to raise start-up capital for a new business? Or do you want to raise funds for a specific project, like a documentary film? Knowing your objectives will help you determine the right crowdfunding platform for your goals and also make sure you have a clear vision for what comes next after your campaign ends.
Know your crowd
One of the most important aspects of crowdfunding is finding a platform with an active and engaged community of potential backers. This will help to make your campaign more visible and increase your chances of success. Some of the best platforms for entrepreneurs and startups include Kickstarter, Indiegogo, www.crowdfunding.com, GoFundMe, and equity platforms like SeedInvest or MicroVentures. If you’re looking for funding for your business idea, then you’re likely to find success on one of these websites. To make sure you find a suitable platform, do your research and identify which communities are most interested in your project. If you already have a large following or network, it may be a good idea to crowdsource funding through one of these websites. Or if you’re a startup, it’s especially important to consider crowdfunding as a source of capital as it provides a low-cost and quick way to raise money.
Write a great pitch
The pitch is one of the most important parts of your campaign and will make or break your crowdfunding efforts. To write a great pitch, you need to understand your audience and what they want to read. Because the majority of backers are looking for a return on their investment, it’s important to show how your business will generate revenue, what your profits will be, and how you will use the funds raised. When writing your pitch, think about how you can find the right tone, grab your readers’ attention, and make them want to invest in your project.
Create a solid plan
Crowdfunding campaigns are all or nothing. You set a goal for how much money you need and when the campaign ends, you either hit your target or get nothing. So it’s important to set a realistic fundraising goal and a timeline for how long you will be running your campaign. You don’t want to leave your campaign running for too long as this can be detrimental. It’s important to set a realistic timeline as backers may lose interest if your campaign goes on for too long. Your crowdfunding campaign is also an opportunity to show backers why your business or project is important, unique, and necessary. It’s a chance to make your backers feel invested in your campaign and help them understand the impact their investment will have.
Find the right platform for you
Choosing the right platform can be challenging, but it’s important to select a website with a broad reach, good user experience, and ease of use. Remember, you will be using this platform to fundraise, so you need to make sure it’s right for you. There are many different types of crowdfunding platforms, so it’s important to do your research to find the right fit for your business. Equity-based platforms like SeedInvest or MicroVentures are for businesses looking for funding through an Initial Public Offering (IPO) and equity crowdfunding campaigns. Reward-based platforms like GoFundMe are for non-equity campaigns and peer-to-peer (P2P) fundraising campaigns. There are also donation-based crowdfunding platforms like Patreon and Donorbox.
Crowdfunding for Nigeria is a great way to raise capital for small businesses, start-ups, and entrepreneurs. Successful campaigns require hard work, and you’ll need to carefully craft a compelling campaign with a strong call to action. Make sure you understand your crowd and tell them a compelling story through your pitch. Create a solid plan and find the right platform for you to get the funding you need to make your business idea a reality.