Crowdfunding: 4 Ways You can Reward Investors

Have you ever considered crowdfunding as a means to unlock extra cash flow for you business?  Or perhaps you have heard about it but wondered how it really works?

As all CEOs would know, there are times when having extra cash flow would greatly benefit your business operations.  Yet, raising funds can be difficult and crowdfunding can seem like an exciting option.  Over the last few years we have been working with business owners to support them on their crowdfunding journey.  It has become very clear to us why 70% of crowdfunding projects fail.  Simply put, it's not enough to have a fantastic product; the key is in the planning and the marketing.   To help our clients we put together this 3 part guide on how to get you started.

Crowdfunding part 1: Reward Types

Crowdfunding has been on the rise now for a couple years; it brings together people who want to invest in a business or idea.  It is typically hosted on an open platform website, easily accessible to both the wider public and more established investors. These investors can pledge monetary support in return for a reward, helping companies reach a financial target which will allow them to propel their business further. It can be an effective way of raising money, but it's not ideal for every business.

There are now hundreds of crowdfunding sites covering a wide variety of interests and industries. However, the investor reward can be categorised into these sectors:

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Whilst crowdfunding may be a relatively new concept, it is worth highlighting that competition in this area is on the rise.  It is essential to put yourself in the shoes of an investor and identify what would make your business stand out above all the rest; likewise, what sort of reward would be appealing. 

Crowdfunding is not the quick fix it may appear to be from the outset. Proper and extensive planning should be in place and we recommend finding yourself the right support (that's us!) to plan and manage your marketing strategy.