How Crowdfunding Can Support Startups
Start-ups have taken a whole new meaning, they are no longer restricted to four boundaries or are a team of ‘freshers’. The market has seen key senior management professionals, quitting their high profile jobs to either join a start-up or initiate a new business offering with a pool of talented young individuals.
However, since these are already established professionals, with available funds or the ability to source funds for their projects, through the ‘good relations’ they built in years. For people like you and me, who have just stepped into this arena to carve a niche for our service offerings, funding is a major cause of concern. We have an action plan in place, an approach strategy, but require funds to execute. This is where, the concept of crowdfunding enters, to help you iron the difficulties.
I am certain you’ve read about PM Narendra Modi’s dream about building the Statue of Unity, a symbol for peace and unity, to be erected in Gujarat. The government requires a minimum of INR2,063 crore and is planning a major crowdfunding strategy, along with a consultancy firm, to raise funds for the project. The entire project shall be executed by the Sardar Vallabhbhai Patel Rashtriya Ekta Trust.
Crowdfunding, as a concept, began in the U.S. and the U.K. and centers around raising funds through websites/blogs/digital media. It is steadily gaining momentum in India. Speaking of start-ups, here are some benefits you can derive out of crowdfunding, along with raising funds for your business:
- Gather interest- Once your pitch is uploaded on a website/blog, people start viewing the document, and you might be successful in gathering interest from people, not just for funding your project, but also to work with you, to realize the plan.
- 2. Potential clients- Your pitch speaks about your service offering, one which we assume, is distinct from existing services offered by organisations/professionals. This pitch can land you your first client, one who has showed confidence in your abilities, just by looking at the presentation of ideas/business plan. Thus, you can generate funds this way.
3. Increase reach and exposure- Digital media has a lot of potential, it goes beyond geographical boundaries. Thus, who knows, your first client/investor could help you go international. However, this is a double-edged sword, if you go wrong, or your idea seems to be ‘copied’, you could land in soup. Mind you, investors, take their business seriously, even a penny counts!
4. Reach right people at the right time: As compared to traditional methods of funding raising, crowdfunding, helps you connect with a larger audience, in one go. All you need to do it, put your business goals in a fashion that is easy to comprehend looks presentably and is as unique as you. The right platform, the right presentation, can do wonders for your project.
5. Kick start marketing for your product- What better than your fundraising activity also acting as a marketing tool? For a start-up, you need to invest heavily in your marketing and sales approach, but if you work a ‘smart’ plan, you can save that money!
However, do not be carried away with the advantages, there are also challenges and legal hassles to crowdfunding. Thus, you need a trusted consultant/advisor who can help you navigate through these challenges and change them into opportunities for you.
Dream wallets, in one of its recent engagements, is advising a non-profit organisation (a start-up), on their project for bringing entrepreneurs from around the globe, under one roof, they aim to organize annual global entrepreneur meet, to provide an interactive platform and business opportunities for budding entrepreneurs, to network with leaders from around the globe. They are aiming at raising INR 2, 00,000 and with our guidance, are now leveraging this crowdfunding opportunity, to not only advertise for the meet but also attract investors for their own business, thereby helping them grow.
No matter how small or big the project is, you can always consider crowdfunding to raise funds for your project.