Non-financial benefits of crowdfunding
- Proof of concept and validation: Crowdfunding gives you a reality check; you can see if others share the belief and value in your project or concept. If they are willing to contribute it is a strong validation that your market approves.
- Help with other forms of financing: A successful campaign can not only be a proof of your concept, but also highlights that there is a market for your business that people believe in. This is very useful when seeking additional finance from other types of financiers such as banks, venture capital, angel investors, as you might seem less risky to them, or get better terms and conditions.
- Access to a crowd: You are addressing a huge audience of individuals, some of whom may have valuable expertise and insights. Crowdfunding in general enables you to interact with them in a new way that provides valuable feedback without cost.
- Powerful marketing tool: Crowdfunding can be an effective way to present a new product or a new company by pitching directly to the people that are likely to be customers. You can create interest, even before the product has hit the factory floor.
However, you should be aware that crowdfunding isn’t a magic wand. Like any business venture, it requires a significant amount of concentrated effort and hard work.