What is Crowdfunding? Benefits and Tips.

What is Crowdfunding?

Crowdfunding is a source of financing in which several people can raise funds for a project via the contributions made by different characters, whether private investors, companies, and nonprofit communities. It is a model of collective cooperation to inject massive funding or resources to different needs of capital projects.

The basic concept is that an entrepreneur promotes a new project to various communities. If the idea is liked by people, they donate different amounts. Crowdfunding is not a new idea, but has been developed in recent years using technology and social networks.

Crowdfunding platforms have been widely accepted, because is a way to validate the idea that it is easier to get 100,000 people to contribute one dollar rather than get one person to give 100,000 dollars. This model is becoming popular because it breaks with the model of being in front of a few investors to develop the project. The difference now relies in being in front of thousands of potential small investors who could give a contribution to the project.

Crowdfunding benefits.

  • Crowdfunding can be used for various projects, whether to perform a concert, people who need help paying debts, supporting businesses seeking to start operations or seeking funds for growth.
  • Crowdfunding allows more flexible access to financing, contrary to the requirements demanded by banks for small business loans.
  • The fees charged by crowdfunding platforms are competitive.
  • The Crowdfunding ecosystem allows easy access to mentors who can help the entrepreneur to have greater success in the campaign.
  • There are platforms that give the entrepreneur the amount financed, regardless of whether it reached the goal or not.
  • It allows greater visibility of the project.

Tips for success in the Crowdfunding.

  • Promotion, broadcasting, diffusion. It is important that at least close friends, relatives and close community know about your project. Remember that this is about big crowds, so the more people share and talk about the project, it is more likely to reach potential donors to the cause.
  • Impact videos. A good video telling the story of the project will have a better impact. The storytelling is a tool used to captivate the crowds and to share the reason of doing project.
  • Social media marketing. Partly related to the diffusion, we know that there are millions of people using social networks. We must take advantage of them and make them participants in the project.
  • Create multilingual campaigns. English is the default language used in business, it will be helpful to have information in that language, and why not in some others. Many languages can get more reach and make the project understandable for them.
  • Progress reports. Watching project advances can create engagement with the followers. People will be excited to watch real results and therefore it could gain more investment for the project.


1 thought on “What is Crowdfunding? Benefits and Tips.”

  1. Crowdfunding is an incredible approach to test the business sector, to make sense of whether the item you need to offer truly has potential. You’re going out specifically to your fans and clients to check whether anybody will pay for an extraordinary thought.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top