If you do not know what crowdfunding is or have not had the chance to read our blog on Introduction to Crowdfunding, please have a read before digging into this blog post; it will help you get a sense of why crowdfunding is so helpful to so many people and institutions like yours.
The crowdfunding market is amazingly large and growing. The World Bank estimated that by 2020 international crowdfunding market will reach $90 billion. Others predict the international market will reach $90 billion in 2017, based on the fact that it has been doubling year after year. In 2012, there were only 250 platforms to choose from. As of now, Huffington Post predicted that by 2016 there would be 2,000 platforms globally.
The Canadian market has had a slower growth in comparison to the UK and the US but grew to $190 million in 2016. But crowdfunding is not only popular in the UK or North America; in 2013, the World Bank concluded that 45 nations in North America, Latin America, Europe, Middle East, North Africa, Sub-Saharan Africa, Asia actively use Crowdfunding. Just as crowdfunding is having an impact across continents, so too is it having an impact across industries. It has expanded from the early adopters–such as the music industry–and now is being employed in multiple different industries, including Real Estate, Arts, Entertainment, Business Development, Social Causes, Biotech, Technology, Healthcare, Scientific Research, Development and much more.
Why is crowdfunding is gaining popularity and interest? Because there are so many reasons why crowdfunding is a great tool for so many projects. Here are just the top 5 reasons why crowdfunding is a great tool for your project.
Top 5 Reasons to Use Crowdfunding
There are many different tactics to increase awareness of a new product, receive funding, gauge interest, and market research. Here are just some of the top reasons we think crowdfunding is a great tactic.
1. HELP YOUR COSTS: Crowdfunding can help fund projects that would otherwise have struggled with accessing funds.
Developing a new product can be costly, especially if you are a new company or organization. If you are unable to receive or are having a difficult time obtaining the funding you need, crowdfunding can help break those barriers. Since you would be avoiding requesting a loan from a bank, you are simply asking for other like-minded individuals to contribute to your project.
2. TAP INTO A BIGGER MARKET: Crowdfunding gives you the ability to tap into a marketplace that is growing every year.
As we’ve said, crowdfunding gives you the ability to tap into a huge market. You would be reaching a substantial amount of people, all at the same time. Using crowdfunding allows you to extend your network locally, nationally and internationally.
3. INCREASE YOUR AWARENESS: Crowdfunding can increase your awareness.
It’s easier to spread news of your new product with your current networks. Part of the challenge of having a new product or service is awareness. One of the main purposes of crowdfunding is to enable multiple people to invest and help produce your product–meaning your product/project will have some traction when it hits the market. Your investors will also be able to share your project with their own networks. Combining platforms, such as your social media accounts, with your crowdfunding will dramatically increase your awareness.
4. VALIDATE YOUR PRODUCT/SERVICE: Crowdfunding helps validate products before making considerable investments in product design.
Sometimes it can be worrisome to start a new project…even more so if you’re entering a new market. Using crowdfunding to help validate the responsiveness and/or desire for a product will essentially allow low-cost and low-risk market research. It also allows for customer feedback which will give the ability for you to improve your product or service before it is even available for the public.
5. INCREASE YOUR LEAD GENERATION: Crowdfunding increases your customer base.
Your investors are already potential customers, and they’ve already expressed an interest in your product. This will allow you to generate more revenue with, you guessed it, less risk.
In order to be a leader in your respected field, there are many things that need to be done. It’s important to have a strong awareness and loyal customer base. You may also need to validate a new product and an increase in your marketplace. However, you need to do all of this in a cost-effective manner. Crowdfunding is a great resource that can do that for you. It can help you test your campaign in a way that will not kill your budget. Which in turn help you create validation and loyalty.
Reach out to us to find out more,letsgetstarted@makegivinghappen.com. We like helping passionate people meet their goals, and we can help you with the crowdfunding platform, campaign marketing, and research.