What Is Crowdfunding?

When we got into the business of crowdfunding, we had absolutely no idea what we were in for. With online media and social platforms constantly changing, we STILL have no idea what’s on the horizon. The more we talked about crowdfunding, the more we realized how few people had even heard of the term “crowdfunding”. The first thing we learned–we couldn’t just start talking to random strangers about crowdfunding or crowdsourcing or crowd-anything really. It helps to begin conversations with, “are you familiar with crowdfunding?“, before jumping into campaign details, social media strategy, and pitch videos. This is something every first-time crowdfunder may discover quickly when launching a campaign, but also something not many people mention.  It seems simple enough but you won’t believe the difference it makes when you educate someone about what crowdfunding is first, THEN get into the nitty-gritty. So here are a few basic facts about crowdfunding for all the newbies just trying to figure things out…and the simplest way we’ve found to describe it…

WHAT IS CROWDFUNDING? Crowdfunding is a pooling of funds (typically online) from people who are passionate about your idea or product. WHO CAN CROWDFUND? Anyone, for anything…within legal reason. (Equity crowdfunding is here and we can now offer contributors/donors a stake in our ideas/products…up to a certain extent of course.*) WHY DO IT?  – To raise money – To engage your audience and/or potential customers   – To validate proof of your goal – It’s great marketing – To connect with your community HOW? By creating an honest and engaging pitch, finding an audience that cares, and being proactive.  (This includes finding the right crowdfunding platform to fit your campaign: Kickstarter, Indiegogo, RocketHub, Pave, etc.) *For more on the latest about equity crowdfunding, keep an ear out for what’s happening with the JOBS Act. The SEC Adopted “Rules to Permit Crowdfunding” that we recommend checking out.  Take it easy crowdfunding fiends…and Happy Crowdfunding to you all. *UPDATE* Consider crowdfunding on your own website, especially if you already have a good size audience, email list, or social media following. You may save yourself some platform fees and have direct access to your funders without needing to go through a third party.