The purpose of crowdfunding is to raise money for a specific cause or project by asking many people to donate money, often in small amounts, over a relatively short period of time, like a few months or a few weeks. A major benefit of crowdfunding is that it is done online, often via social networks, which makes it easy for supporters to spread the word about a cause or project. But there are a few Crowdfunding myths that drive the creators apart. Let me shed some light to bring some clarity for the audience to see.
Here are the Top 6 crowdfunding Myths.
- Crowdfunding can be done effectively with huge social media presence.
- Crowdfunding is only for startups.
- The best thing about crowdfunding is a lot money.
- The crowd is waiting for me on the crowdfunding platforms.
- It’s all about the money.
- All crowdfunding platforms are the same.
Let’s understand these Crowdfunding myths in detail.
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Crowdfunding means huge social media presence
It is often believed that to reach a bigger audience, social media presence is very important. Social media is considered as the only platform to reach a bigger crowd out there. It is true, but not in all cases.
Social media may reach countries around the world, but for crowdfunding, it is not the same. Crowdfunding is a process that takes place between two known or unknown parties. There has to be ample trust, faith and potential. For funding to be acquired by crowdfunding technique, the project creator has to have a solid project with a longer vision and a higher calibre. Yes, along with this, social media can serve as a helping hand to reach all places.
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Crowdfunding is only for startups
There is a misconception that crowdfunding is just for startups or new businesses struggling to raise seed capital. The crowdfunding myth outlined above is not true, and it needs to be dispelled immediately.
Unlike traditional methods of raising capital through banks, angel investors, and other financial institutions, crowdfunding is a platform that helps remove financial barriers associated with raising capital. Crowdfunding can be used by any company or business with a creative idea, regardless of its stage of development.
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The best thing about crowdfunding is a lot money
It is obvious that with the word crowd, people can believe a lot of people will invest the money in their project. Strange, but true. But it is not the same with crowdfunding. A lot of people firstly need to know about your project, its potential, vision, and long term goal.
Secondly, they also need to understand, on their own, what is its market availability, public preference, competitors’ strategy of market sustainability & a lot more. An assurance with all of his of some return, is the basic need for a lot of people to fund your project.
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The crowd is waiting for me on the crowdfunding platforms
There is a myth that people are out there waiting to support your idea. Although crowdfunding is often started by loved ones, it rarely ends with them. Word of mouth, the press, and social media are the most common methods of getting information about campaigns.
To get people to flock to you, you will need to reach out to your networks and ask them to support you and spread the word to their networks. The crowd still needs to be reached to get the right backers, no matter how your campaign has been featured or how publicized your event is.
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It’s all about the money
A crowdfunding campaign has more than just financial objectives. It should be, rather, to make a change in society. The benefits of crowdfunding go beyond boosting finances. Creating buzz with your idea will help you validate it and validate your idea.
Innovators and entrepreneurs are bringing products to market with the help of crowdfunding. This platform enables thousands of innovators to generate brand awareness while still in the product development phase and facilitate a larger conversation with backers and potential customers.
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All crowdfunding platforms are the same
In order to identify which platform is best for your project, you need to be familiar with the nuances of each platform. In order to succeed with a crowdfunding campaign, choosing the right crowdfunding platform is crucial to converting viewers into backers.
For the best campaign results, make sure you consider what each platform has to offer, including fees, flexibility, customization, and support. You may need to use some platforms more than others depending on the kind of product you have. The fundraising model used by the platform is also an important thing to consider, since there are several options, including loans, rewards, equity, and donations.
Related Article: How to do Fundraising for Startups in India?
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