Insight

Crowdfunding: how to really make it work

Published on May 3, 2016

Crowdfunding has emerged in recent years to enable businesses to access funds more easily, from a wider range of individuals. But gaining access to more people isn’t a guarantee of success. You still have to sell the benefits of investing in the business. So your presentation must still address the core aspects of any business venture:

  • Is it going to be something that other people want to buy, at this time, at these prices?
  • Do the directors have the necessary skills?
  • Is it profitable,
  • Will it be worth a lot of money in a few years?

The current experience of crowdfunding indicates that you need a big hitter, ideally a known investor who will agree to invest around 25%-30% of your target before others will follow

But there’s another way of enticing people to invest because crowdfunding allows you to add other benefits to the traditional ones listed above. Selling a few shares for small amounts means that you can give benefits that are common with customers to the investors. So your customers become your investors. Not only do they have a share in your success but they have fringe benefits such as access to limited editions or chances to meet designers.  And these benefits encourage them to spread the word to other new customers. A real win-win.

Our video explains more.