How Crowdfunding Raises Money and Boosts Brand Appeal

How Crowdfunding Raises Money and Boosts Brand Appeal

With the rise of crowdfunding websites, it’s very possible that you’ve contributed in some form or another to a crowdfunding campaign. Perhaps you donated a small amount of money to your friend’s independent film, or helped your alma mater’s a cappella group record an album. With crowdfunding websites so accessible to the masses, it seems funding campaigns have been launched for just about everything.

Nonetheless, small business owners often underestimate the benefits that crowdfunding can offer for more than just that student film or a cappella CD – with its ability to reach broad audiences and offer unique investor benefits, there are a number of ways crowdfunding can boost brand and raise capital.

1. Built-In Market Research
When you’re starting a business, it’s normal to spend a great deal of money conducting market research. Equity crowdfunding campaigns provide built-in market research by evaluating the responses to your campaign.
If someone is interested in investing in your business, they are likely your target market or at least have a good understanding of your target market. With crowdfunding, you actually get to save money while testing the marketplace. A campaign can provide great insights into your target customer base.

2. Prove Yourself
If you’ve seen the show ‘Shark Tank’, you may have noticed that potential investors look for some proof of previous success. Indeed, this is understandably so. Even a good idea can seem too risky to invest in with no proof that there will be a return on the investment later on down the road. Not only can a successful crowdfunding campaign be a great place for business owners to start, but beginning their business with a solid foundation of supporters can help show off market validation to potential investors.

3. Work of Mouth
Earlier this year an Internet user began a joke campaign to raise $10 in order to make potato salad. The campaign went viral, and ultimately raised $55,492. With a little humor and a lot of social media sharing, the potato salad campaign was able to reach an astounding number of people and raise an even more astounding amount of money. While it may seem over the top, this joke campaign is a great glimpse into the value of word-of-mouth and what it can do for your crowdfunding campaign, and ultimately for your brand. If potato salad can pull in that kind of money, imagine what can be done with an innovative and exciting business opportunity.

4. Establish your brand
Typically your crowdfunding campaign will involve providing potential investors with as much information as possible about your product or service. Whether it’s through your marketing material or in the benefits you provide to investors, crowdfunding can be a great way to establish your brand appeal, while demonstrating your mission statement to investors. Even after the campaign, a brand with strong values will stay in the minds of investors for later opportunities.

5. Let the Publicity Work for You
As evidenced with the potato salad campaign above, a successful crowdfunding campaign can go viral or garner publicity for its success. Not only does crowdfunding allow for potential investors/future customers to easily pass the word along, but the news of a great campaign can help put a spotlight on your business for further publicity.

6. Craft Your Campaign
The saying “you never get a second chance at a first impression” may be true for crowdfunding campaigns. With only your campaign page to provide all of the necessary information to investors, you will want as much information displayed in the most efficient way possible. While it may appear as a challenge at first, deciding the most creative and effective way to excite investors about your product and brand will help you to hone your campaign and inform future marketing efforts.

Don’t underestimate the amazing benefits that crowdfunding can have for giving your brand great beginnings, and in sowing the seeds for later investments. Contact us for more information on how to get started with your own crowdfunding campaign.