Crowdfunding – What is it and why it is useful?

You may have seen us mention Crowdfunding a lot recently at Conscious Dreams Publishing.  However, this isn’t something new to us. Daniella Blechner,  Founder of Conscious Dreams Publishing used crowdfunding to raise the money to publish her own first book – Mr Wrong.   From there, the idea for CDP was born and two years on, the business continues to thrive and has published over 28 books with plenty more on the horizon in 2018.

So what is crowdfunding?

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In simple terms, crowdfunding (or crowdsourcing) is a way of raising finances for a project, by asking a large number of people for a small amount of money.  Together people invest in an opportunity, usually in exchange for equity, dedications or a certain number of the products for example.

The fundraising is predominantly done online and thanks to the continued rise of social media and the numerous platforms that individuals can utilise, the reach of campaigns can be enormous, especially when people share on their network.

Why do people use crowdfunding?

When you have a business idea or a project to fund, and you cannot finance this yourself, there are only really a few options available to you.

  • Bank or family loan
  • Investment
  • Crowdfunding

Options 1 and 2 can often come with lots of tricky clauses and you are then still financially liable for the sum you borrow. This can be a lot of pressure to put on yourself when your project is still an idea.

What are the benefits of crowdfunding? 

There are lots of benefits to crowdfunding which include:

  1. Lower financial risk

Crowdfunding allows you to raise the money you need without putting your personal life or belongings at risk.  If your idea does not work, people have understood that risk when investing and unlike a bank loan, you do not need to pay the money back.

  1. Giving you a platform and helping you to build an audience

When you use crowdfunding to raise funds for your product, you are simultaneously also building a community and support network around your idea.   If people have invested financially in your product, they are also going to have invested interest to see how it grows and develops once launched or on the market!

This community will be 100% behind you and want your product or idea to succeed and so will more often than not act as your virtual cheerleaders!  They also provide you with a sense of accountability, giving you the energy to ensure you reach your goals and achieve your dreams – after all, they believed in you right?

  1. Timeframes

Crowdfunding campaigns usually have a funding goal and your project will have a time limit.  When people see that you are up against a deadline, this urgency may help them make more spontaneous decisions to invest.  Once they have made that investment, they will then want to help you reach your goals so that they do not miss out on their rewards (depending on how you set up your campaign).  In all human nature, there is an underlying desire to succeed

feedback4. Feedback

When launching any product it is important to do your market research and gauge how much interest in your product there might be.  Your crowdfunding campaign allows you to do this – if people did not believe in the product, then they would not invest!  The success of your campaign will help you validate that your product or service is something that people are interested in.  You can also utilise the skills of your funders by asking for feedback and involving them in processes and choices you have to make.  It can be a lonely road as sole trader or entrepreneur, crowdfunding gives you access to a new team.

Where do I start?

Although crowdfunding is an excellent tool for some, it isn’t always suitable for all projects or ideas.

Also, a crowdfunding campaign can take a lot of work. Your campaign needs to be engaging, visually appealing, well thought through and promoted. It would be naïve to expect people to invest their hard-earned money into anything that looks or feels half-hearted.  If it looks like you couldn’t be bothered, why should they be?

As someone who has used crowdfunding herself, Daniella has excellent knowledge of what a successful campaign looks and feels like. In the years since her campaign and the launch of Conscious Dreams Publishing, Daniella has honed and developed her marketing and social networking skills, something critical to a successful campaign.

If you are thinking of setting up a campaign for your book or project and would like some support why not contact us and take advantage of a free 30 minute consultations?  You can book one here.

9781912551101Want to see an example of a crowdfunding campaign? Check out our author Ionut’s campaign currently running – he is asking for support to help bring his book LIVE.LOVE.DREAM alive.

You can read more about his campaign on our blog.

When learning about anything new, our best advice is to start with research! Here are some great starting points for you to find out more about crowdfunding and the different platforms you can use:

www.crowdfunder.co.uk

www.indiegogo.com

www.youcaring.com

www.kickstarter.com

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