5 Ways To Raise Money In Crowdfunding

5 Effective Ways To Raise Money In Crowdfunding
5 Effective Ways To Raise Money In Crowdfunding

Crowdsourcing is the basis of crowdfunding. Social media has irrevocably revolutionized the way that we raise capital and communicate. Crowdfunding platforms are becoming increasingly popular as the means to connect entrepreneurs with investors. It pulls together a community to invest in a project usually through the internet. The process to raise money in crowdfunding is simple. Pitch the idea, set a goal, and set a timeline to raise funds. Investors review the pitches and make a decision to pitch in. The goal is to fund the project without any intention to back out.


5 Ways To Raise Money In Crowdfunding
5 Ways To Raise Money In Crowdfunding

1. Make Your Crowdfunding Pitch Stand Out

The initial messaging and pitch should stand out and beg for your funder’s attention. It should engage both the emotional and rational parts of the investor’s brain. Try telling a compelling story about your offering or yourself to do this effectively. Add videos and succinct information about your product or service to make the story appealing.

It is always best to tell the investor what the funding will mean to him/her. This is more so when you pitch for equity crowdfunding. The rewards should be unique and compelling to make the investor want to be a part of your story. Crowdfunders can buy into your pitch for an emotional reason too. Study successful pitches that are available online to make yours a great one.

2. Use Your Personal Network To Raise Money In Crowdfunding

First-time pitchers often underestimate the value of their network. Use supporter engagement in the form of friends and family to get you started. It is often the best way to steamroll your campaign. Acceleration is fast when a potential investor finds a modicum of investment already in the kitty in the initial phase as it is an indication that the project has value. Some platforms offer social proof of the investors already engaged in your project.

If there are celebrities or large investors in your endeavor it might have a positive impact on the crowdfunding process. Well, known investors in the fray indicate a strong pitch.

3. Plan Your Marketing And Outreach 

5 Ways To Raise Money In Crowdfunding
5 Ways To Raise Money In Crowdfunding

A crowdfunding platform is not one that merely lists your project. It needs attention to detail and effort from you at all times. It should be cohesive with your offline and online efforts to get the project off the ground. You need to plan and invest time and effort in the creative campaign you put up to gather attention.

The campaign often needs a push and shove to be active. Positive PR and marketing efforts are the keys to get investors especially if you are offering equity and a large amount of funding is needed. You need to figure out legal and operational frameworks before you proceed.

4. Know Your Investor

It is crucial that you should understand what type of investors you are wooing. If you require a smaller amount the minimum entry amount could be small, but when you are pitching for larger funding, you might raise the entry amount to reach your goal. Couple online activity with offline marketing to reach your investment goal with ease. The time is limited on most networks, so reach has to be fast and laser-focused.

Crowdfunding is here to stay as more and more investors are looking for worthwhile projects on these platforms. Leverage your social media presence wisely to reach your investment goals.

5. Pick Your Platform Carefully To Raise Money In Crowdfunding

It is crucial that you pick your platform carefully. There are different kinds of crowdfunding and different sectors like music, startups in education, agriculture, or healthcare. You can choose a rewards-based or equity crowdfunding where the funders become shareholders in the venture. 

Choose the platform as per your funding needs. You may want to pick the one depending on the sector you want to work in, or the people already on the platform or according to the way the fundraising is structured. You may want to allow the platform to raise whatever is available or choose to go with a 100% funding where investors do not fund the project if the initial fundraising goal is not met.

Kickstarter, Indiegogo, Crowdfunder, and Circle Up are some of the popular crowdfunding platforms that offer you service. Some platforms may ask for a fee. It is a good idea to study all the platforms available and choose the one that fits your needs.