Start-up capital is sometimes a tricky animal. For entrepreneurs, things are different these days with more opportunities to successfully achieve business ventures. One such opportunity is the advent of crowdfunding, when an individual reaches a goal by receiving and leveraging small contributions from many parties. In other words, it’s a collection of finances from backers, can be used to fund an initiative, and typically happens online via internet platforms. This gives entrepreneurs multiple avenues with which they may raise start-up capital, funding, etc.
Candice Peters can tell you all about this as she used crowdfunding to start her Hyde Park Body Boutique; you can find her story here. According to the interview she provided Soapbox Media, Peters was a stay-at-home mom who had a passion for training women and wanted to join the workforce again. She was repeatedly rejected for bank loans to start the fitness studio and finally turned to crowdfunding to achieve her goals. Through the platform of SoMoLend, she raised $9,000, with the help of three lenders. Peters was able to remodel her studio, hire six additional personal trainers, and launch the Spincinnati indoor cycling class.
If you’re having trouble going the traditional route like Peters, this just might be the way to go! Here are 3 tips to keep in mind if you’re considering taking the route of crowdfunding.
3 Crowdfunding Secrets of Successful Entrepreneurs
1) Have a network of relationships
Have you ever heard the old adage “It’s not what you know but who you know”? That can definitely ring true in this case. It’s important to have a network of people around you who will understand your vision.
This group of people, the “inner circle”, are key in helping spread your message and vouch for your credibility. It’s a great benefit to have that support system.
Get connected with entrepreneurs in your area. You can build up partnerships, and often, if you help a person, they will help you back. If you don’t know of any entrepreneurs in your area, there are so many opportunities to connect online with others!
2) Share a story with a human connection
Folks are much more apt to give money if they believe in the story you have to share and find it significant. Think about the reasons why you’re doing what you’re doing and then relate it on a human level in order to touch people’s lives.
We recently did a GoFundMe for one of our clients in Uganda. They run a farm that feeds the community and employs people when jobs are hard to come by. The feed a school of over 200 students, so the impact on their community is tremendous. When we shared that story with people, they donated because they knew it was going to a good cause.
3) Offer positive incentives
If folks are willing to invest their hard-earned money with you, you in turn must be able to offer them something! This can be as simple as having a say in the design of a product or getting earlier and better access to products and services before it reaches the general public! It’s also a good idea to increase the desirability of incentives based on the range in which people give: $20 will still get the investor a perk but $75 dollars will generate a better offer!
There are many great platforms to get you started with crowdfunding. Here are a few websites to check out if you’re interested: Kickstarter, Indiegogo, and GoFundMe. Have you used a crowdfunding site for your business? Let me know in the comments below!