Catch Your Audience: Crowdfunding

A friend of mine asked me to drop by an email to let him know when I am free for a hangout. I asked him twice, “Dude! Email?” Doesn’t it look a bit obsolete when I have WhatsApp and WeChat installed on my smartphone? Absolutely similarly, the idea of offline funding appears outdated when I weigh it against crowdfunding.

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Funding: Traditional vs Modern

The traditional process of raising funds is frustrating and often fruitless. You need to browse through your network to find out an appropriate investor you are connected to, get introduced with the help of some old connections, try hard to capture their interest in your plan, schedule an appointment if you succeed in doing so, continue the dialogue till he finishes the postmortem of your executive summary, and if you have luck, you finally win the deal. Pretty much an effort it needs, right?

Now, consider the process of online fundraising. Submit an online application on a suitable platform, it conducts due diligence after which you create your profile and launch your investment campaign. Get access to all the investors suitable to you in a go, choose the one that best fits your venture, and you get your funds. The company can put all of its related documents at one place, thus making it a one-stop store for the investors. Besides, one gets additional tools to reach out to as many as possible in short time. This is the magic of Crowdfunding.

Advantages of Crowdfunding

It is particularly beneficial to the newcomers who do not have ample contacts or status quo in the market. Apart from this, there are some crowdfunding platforms that also counsel the early entrepreneurs about the funding process. If launched well, it creates a buzz and increases the popularity of the venture on social networks like LinkedIn, Facebook and others. At the least, you have an audience now to perform for. It also has a legal advantage in some cases. There are platforms which conduct the process at reduced legal expenses than what would otherwise arise in case of offline fundraising. It shouldn’t cost money to raise money!

Hold on! There’s a twist…

For you to be able to sell your product and make money, it is important that people like your product and find it worthy enough to pay for. If it ends up being a cannot-do-without-it one, it is highly probable that somebody else might try to come up with a slightly modified version of the same. At the same time, it may also be a test to check whether your product is really needed or not. In case it is not, you save the time and effort of proceeding on the wrong path.

Today, there is an exploding crowdfunding sector across the globe led by the likes of IndieGogo, Kickstarter, and Lending Club which are democratizing access to capital, fueling innovation and dynamically changing the face of entrepreneurship. Started way back in the US and the UK, these days crowdfunding market has become burgeoning in India as well with platforms like Start51, BitGiving, Ignite Intent, etc. coming up. It is a success story of the famous Reliance Industries founded by Dhirubhai Ambani, when his evolving textile business was crowdfunded by the communities in the state of Gujarat. Evidently, it is becoming an important catalyst to convert ideas into reality.

Written By: Priya Kumari