PDA

View Full Version : Is Crowdfunding a Logical Way To Raise Capital?



Rainman
01-30-2014, 01:06 AM
Sites such as kickstarter were created with primary purpose of helping creative individuals achieve their dreams through getting help from anyone interested in the project they had in mind but didn't have the money to see it through.

More and more of such sites sprung up, some of which were targeted at helping:

businesses raise capital to expand and grow. . .
The question however is, if you're just starting out as a business person should actually rely on crowdfunding as your only means of raising capital?

novasparker
01-30-2014, 10:30 AM
Maybe not as your only funding source, but it is definitely a viable solution. The cool thing about crowdfunding is that you don't have to pay it back. Of course you have to give your benefactors something in return, but at the end of the day, not only is this a great way to get some cash for your project, but a great marketing strategy as well. You create some buzz, which drives your business when you get established. It's a win-win for those who can get the cash together to get started. I know a band that funded it's entire debut album from crowdfunding and they are on the verge of hitting it big time now.

Jkility
01-30-2014, 10:46 AM
Depends how much your looking to get really. I was talking to someone today about it as I was explained how I want to become a pilot and that it costs 84k for the training which I would initially have to pay, he suggested crowdfunding but thought for this amount of money that would just be unbearable and long to fund that amount of money.

theshaynee
01-30-2014, 11:14 AM
Crowdfunding is great. But I have to agree with what someone mentioned above: you should have more than one option for raising capital.
There are tons of other marketing strategies out there that you can look into to help generate some money or at least awareness for your business.
Another good idea is to ask around. Just ask every person you know if they'd be willing to help out and the worst they can say is no. You'd be surprised who would be open to donating to your cause.

LindaKay
01-30-2014, 11:43 AM
I think it's a good option. For those who might not be able to acquire capital in any other way, it's fine to try on its own. I think it's a good idea to try to save and get loans, too, if possible.

delusional
01-31-2014, 01:01 AM
It's a good source of funding for a lot of interesting businesses nowadays. Although it mostly applies to technology products. Most of the people on crowdfunding websites are quite tech-savvy so it's normal they tend to fund technology products.

So if you business is in this field, you might have a chance. Also keep in mind that you need a working prototype of your product before you can even start the process on Kickstarter. In the past, this wasn't required but they changed this policy because a lot of people couldn't get their product to work even after being given over a million dollars.

fredkawig
01-31-2014, 08:10 AM
Crowdfunding is a good option for raising capital but not the only possible one. You can try loans for businesses which offer a very small percentage of interest. There are also government programs and facilities which help you start a business and lend you capital at little to no cost. Funding from your family and humbling yourself to ask for some help is also a good idea ^_^. Basically, there are a lot of ways to raise capital and most of them are easy, you just have to find the right people and programs that go with it.

Taru
01-31-2014, 09:14 AM
Yes, I would consider it a relatively logical way of raising capital. After all, it has been proven to work and it's certainly a little bit more accessible than having to look for a capable and open-minded investor willing to risk a portion of his company's finances on just an idea. Furthermore, I think this type of funding also teaches our future generations on how to properly plan out and proper execution of turning an idea into reality, because a project is shown from inception onto each different stage up to completion, including all the benefits they offer potential backers - which then teaches about incentive and giving good deals / negotiations.

Personally, the only difference I see with this method and the more traditional one is that the investors you have to answer to is more spread out and the lines between investors and consumers get blurred a little bit, but otherwise it's basically the same process if I'm not mistaken.

owesem75
01-31-2014, 10:16 AM
To gather capital - YES. But I think crowd sourcing is an ideal place to present your ideas, pool like minded individuals to support it and for you to make it happen. Sometimes, there are so many ideas but the idea owner doesn't have the means to start it. with this crowd sourcing scheme, it makes this possible and NO IDEAS are wasted.

LindaKay
01-31-2014, 01:25 PM
It is somewhat the same thing, but it's easier to do because you can reach out to the entire world via the Internet. Since the donations are a bit lower as well, it's a bit easier to get people to jump on board. Some people might not be willing to shell out a couple thousand for a new business, but they might be willing to pull out a couple hundred. Kickstarter makes that possible.

Lodismel
02-02-2014, 02:24 PM
Crowdfunding is a great option. The problem is whether it is the best option for your particular business. The people who will likely get the highest and best amount of crowdfunding are the people who are most well known. If you have somebody who is well known in whatever field you have chosen then crowdfunding might be a great choice. If you are a start up company with relatively unknown people then it might be better to go with more traditional options.

jfab
02-04-2014, 09:19 AM
I will say yes to this. It will also push you in a way that you will be inspired to be more passionate and creative about your project. I like Kickstarter because it has already a record of really helping people fund their projects.

JohnSword
02-05-2014, 03:50 AM
Of course crowdfunding is a logical way to raise capital. Just look at all the success stories on Kickstarter.

However, I think the key word here is 'crowd'. If your brand name is relatively unknown, then it's quite hard for you to reach your funding goal unless you're offering a unique product. Take FilmCow for example. They were able to achieve 3 times their funding goal on Kickstarter last year because they have been creating popular content on Youtube for years.

I guess the point I'm trying to make is that crowfunding should be a logical way to raise capital only after you've establish your brand name.

delusional
02-05-2014, 05:54 AM
Of course crowdfunding is a logical way to raise capital. Just look at all the success stories on Kickstarter.

However, I think the key word here is 'crowd'. If your brand name is relatively unknown, then it's quite hard for you to reach your funding goal unless you're offering a unique product. Take FilmCow for example. They were able to achieve 3 times their funding goal on Kickstarter last year because they have been creating popular content on Youtube for years.

I guess the point I'm trying to make is that crowfunding should be a logical way to raise capital only after you've establish your brand name.

I mostly agree but this is not valid for everything. Kickstarter has been only successful for products related to technology. Other "products" are almost always funded by someone who likes art.

delusional
02-05-2014, 05:55 AM
Crowdfunding is a great option. The problem is whether it is the best option for your particular business. The people who will likely get the highest and best amount of crowdfunding are the people who are most well known. If you have somebody who is well known in whatever field you have chosen then crowdfunding might be a great choice. If you are a start up company with relatively unknown people then it might be better to go with more traditional options.

I don't think being well known is the key factor for success. I think it is having a great product. If your product is great, it will be featured and picked up by blogs a lot faster.

Bonyi
02-05-2014, 07:22 AM
In my opinion, it depends on how much you want to raise. If the amount you want is high say a large capital, then I don't think it is the right place to raise it. But for small capital, you can raise it with them. At least you have nothing to loose. No interest to be paid at the end of the day.

alec
02-05-2014, 01:03 PM
From what I see crowdfunding a product or business is most likely to succeed if you have invested some capital and developed some of the ideas before showing it to the crowd. In general, people are more likely to invest and trust a partially working product than just an idea, so much in fact that buying a partially finished product is becoming the norm in some business fields (digital ones), like gaming. So yeah, you could rely only on the crowd for capital but it's wise to invest some beforehand and you'll have a higher chance for success.

cpefley
02-05-2014, 07:02 PM
I think that it is a great way for creating capital for a project or business venture. I'm not sure that it would work in every situation, but Kickstarter has helped many people achieve their goals with crowdfunding. Have you every used Kickstarter, or are you just curious about different opinions on the subject?

pahagwl
02-15-2014, 05:27 AM
Sometimes people come up with certain radical ideas which have a low probability of achieving success. So, raising capital for these types of ideas through traditional routes might become very difficult. But they might appeal to the general public because of there radical nature. In these types of cases, the only way to gather capital is via crowdfunding, i.e., looking to the people for donations. Crowdfunding is logical in the sense that it works as a marketing exercise as it involves the active participation of the people. If people show a positive attitude towards a business idea, it means that it has the quality of being worthy of investment.

crimsonghost747
02-15-2014, 07:25 AM
Obviously you want to have some capital to start off with. But crowdfunding is definitely an amazing opportunity to help with your finances, and yes: it could very well be the only form of financing you need.

TaraC
02-15-2014, 06:14 PM
Crowdsourcing can be a great way to fund a business. It really depends on the product. I know a few people who tried to use Kickstarter and didn't meet their goal. If you don't reach your goal, then you don't receive any of the funds. I have studied a few crowdsourcing campaigns because I hope to launch a business using a crowdsourcing in the future.

Most of the successful campaigns started laying the groundwork before launching their campaigns. A good network and generating buzz is also key.

LindaKay
02-20-2014, 12:52 AM
I have known some people who weren't able to achieve their goals either, and that's unfortunate.

Some brands, though, have done exceedingly well. For example, the Neptune Pine smartwatch. They had a really impressive idea, and they made a fortune through Kickstarter. Other companies can too.

CeliVega
02-23-2014, 03:54 AM
Kickstarters works. So I think it IS an effective and logical way to get funding and capital for whatever you are working on. As long as it appeals to the public, holds potentials and promises, I think crowdfunding is definitely the best choice to go for. Of course, you have to be really good with presenting what your products or services are about so that the public can understand what you are developing and is willing to fund your businesses.

autograph
02-23-2014, 07:56 AM
Crowdfunding site like Kickstarter is great if you have thought of a really creative idea without the financial means. Although the idea of your project might look good on paper, your project might cost a bomb. This is where crowfunding becomes really handy. You basically make a promise to the people who backed your project to reward them with a product of your projects while getting a lump sum of money for your initial starting capital.

WeDontSleep
02-23-2014, 08:01 AM
I think Crowdfunding is a very smart way to raise capital. You tell people what you are planning to do, show them how you're gonna do it and tell them how they will benefit from your project. If they think that it's worth investing in, they will help you. There were a few good projects that were only made possible by Kickstarter website like the Ouya video game console, The Angry Video Game Nerd Movie, they were all crowdfunded.

sofieb529
02-23-2014, 11:16 AM
I'm not sure its the best method to focus on. I love the concept of crowd surfing especially for charities but for a business you have to find other methods as well.

mameeker@cuse
02-24-2014, 04:36 PM
Tech based business's seem to do very well crowd-funding. Other business's tend to fare not as well.

Ryand88
02-24-2014, 04:54 PM
It works for tech startups, that's because tech startups are bring a new product to the table that consumers want ; you throw another type of business in there and it really isn't going to fare so well, It's always worth a shot but depending on crowd funding will never be a smart idea and you need to raise capital from other places such as personal savings or a loan.

janineaa
02-27-2014, 09:20 AM
It seems like a good solution to raise capital, but then again a startup should always have back up plans as to where to get more funds. What's good about crowdfunding though, is that you don't have to pay them back exactly. Another plus for crowdfunding is that it makes the public known about the kind of project you're going to use the money on. It gets people talking, which makes the project/business established. And of course, it is a fun way to bring people together with the same passion. It'a a win-win!

DwightDuncan
12-06-2014, 04:53 AM
It's a good source of funding for a lot of interesting businesses nowadays. Although it mostly applies to technology products. Most of the people on crowdfunding websites are quite tech-savvy so it's normal they tend to fund technology products.

So if you business is in this field, you might have a chance. Also keep in mind that you need a working prototype of your product before you can even start the process on Kickstarter. In the past, this wasn't required but they changed this policy because a lot of people couldn't get their product to work even after being given over a million dollars.

you can use crowdfunding, Fundrez etc for raising funds. These are some of the good options to collect money for your business.

BradYoung
11-17-2015, 08:48 AM
I guess that this sort of thing can work if you have any idea which is innovative and has MAJOR potential to make money. I know some guys who have had success with this but they have come up with really unique ideas and concepts that have leapt out and grabbed the attention of investors. Saying that though, I also know of plenty of others who have literally got nowhere.

If your idea is exceptional then you will get your funding, if not, forget it.

-Brad

elisagrace
12-24-2015, 05:02 AM
Hi Rainman,
No doubt Crowdfunding is a great way to raise capital, but it is necessary to do proper research and select a reputable campaign with a great success rate. Also make sure carefully look at the terms and rates of the Crowdfunding Campaign.
Thanks!!

micheljanet
12-27-2015, 08:25 AM
Depends how much your looking to get really. I was talking to someone today about it as I was explained how I want to become a pilot and that it costs 84k for the training which I would initially have to pay, he suggested crowdfunding but thought for this amount of money that would just be unbearable and long to fund that amount of money.

Malik Suleman
12-28-2015, 02:27 PM
yeah its the right choice

andrew2510
03-23-2018, 07:08 PM
We have a great book on our website that has plenty of useful information for small businesses, completely free too. Link's in my signature

Xenox999
03-24-2018, 06:09 PM
I think it's a good idea because it can teach you a lot