Five non-monetary benefits of crowdfunding
Crowdfunding is a pooling of funds from people who have a shared passion for your idea — often with the incentivizing promise of receiving a reward or “perk” in place of traditional equity. Crowdfunding allows you to reach out to your community and network, who, in turn, reach out to their own communities and networks until your ideas receive funds to become a reality. Through this process, you create an audience and enable these passionate people to feel pride in participating with you. Contributors to crowdfunding campaigns can experience the joy of being part of something bigger than themselves and share in your success as you achieve real results.
Crowdfunding’s basic concept of pooling funds is not at all new (for example, did you know the Statue of Liberty was crowdfunded?), but with the help of technology, it’s becoming an increasingly popular way for people to get their nascent, gestating ideas off the ground. It is a disruption of the funding models that include bank loans, venture capital, and private equity — and where it is most successful and innovative at doing this is in its ability to engage an audience and build viral momentum for an idea. Like at a baseball game, the “crowd” of crowdfunding isn’t passive — they watch, listen, cheer, and even boo; they provide a feedback dynamic previously unknown in fundraising.
Because of this unique feedback loop, as a crowdfunding campaign harnesses the power of your network (and beyond), it can do a lot more for you, your idea, your product, your mission, or your goal than simply raise money for it. There are a number of intangibles that crowdfunding is in a unique position to provide, as it empowers entrepreneurs to leverage the power of the crowd to achieve something greater than they could by themselves.
Thus, below, are five of the leading non-monetary benefits of crowdfunding:
1. Gauge demand and mitigate risk
You’ve come up with a product idea, but will people really buy it? And how much are people willing to spend? As an entrepreneur, you are passionate about your work and what you are creating. By taking your offering directly to consumers through a crowdfunding platform, you have the opportunity to get feedback and learn what people think about your product. Market validation 2.0.
2. Test your marketing and develop your brand voice
Crowdfunding campaigns create a piece of marketing collateral for your business. Entrepreneurs are encouraged to use their campaign as a platform to post an unlimited amount of information about their project — this can include anything you think your audience would find relevant, including commercials, team pictures, and press mentions. Indiegogo provides widgets that can be easily embedded into websites, blogs, and emails to drive traffic to projects.