Crowdfunding in the recent years has been taking the world by storm. It has become the go-to solution for every funding need. For those of you who still are oblivious to what the fuss is all about, “crowdfunding” is a way to collect small amounts of money from a large number of people online to support a social cause or a personal or business need.
While there are many who have crowdfunded successfully their college tuition or funds for medical treatment or a social cause and what have you, there are still many who keep scratching their heads over how it’s done. Then there are others, who have a completely ignorant view on the subject. It’s time to dispel these myths surrounding the world of “crowdfunding” and help you be smarter and more realistic about crowdfunding.
#Myth 1 -Crowdfunding Is all about Money.
While “funding” is an integral part of crowdfunding, it can be so much more than that, if done correctly. For a start up, it is a great way to validate their product or service; it is also a great way to advocate a social cause, it also works as a platform to create a buzz around your product/idea and become viral.
For instance, let’s assume you developed the prototype of a biodegradable laptop case. By creating a campaign on a crowdfunding website and putting it out to the public, you can gauge their reaction towards your product and receive feedbacks. This way you can validate your idea! You can also create awareness about your product using the wide networks of the crowdfunding platform and in the process gather necessary funds not just from the campaign but also from your investors in future.
#Myth 2 -It is very expensive.
There is no upfront registration fee to start a crowdfunding campaign. You only pay a percentage of fee (which again is very nominal) on the amount you have raised. Impact Guru has come up with an interesting pricing concept, which helps you save even more money called the S.M.I.L.E program ( Here’s how it works)
#Myth 3 -Crowdfunding is only for NGOs.
Majority of the people are only familiar with donation crowdfunding and it’s a common misconception that only NGOs can crowdfund. When in fact there are many other types of crowdfunding like equity based, rewards based and debt/ lending based crowdfunding and anyone, from a social enterprise, or a corporate entity or an individual in need of funds for a variety of reasons can crowdfund.
Here are some examples of how A social enterprise that is raising funds to develop an educative app and how Parents of a 6 month old, collecting funds for their daughter’s treatment.
#Myth 4 -Crowdfunding = Online donations
Although crowdfunding happens online, it is a very unique way of fundraising and far superior as far as the reach and impact goes. When you make on online donation, you go to a particular website, make the donation and the story ends right now. Yes, you did good but did you inspire anyone? With crowdfunding, you not only donate the amount that you had planned to but you also share it with you family and friends on social media, in turn they donate and further share amongst their networks thereby creating a chain effect and as a result, you end up raising a large amount of money collectively. Plus, you also get the gratification that you needed on social media for leading the cause and inspiring so many others.
# Myth 5 -Crowdfunding is online begging!
It most definitely isn’t! Crowdfunding is based on a mutual understanding between the campaigner and the contributor .
Donors/ Backers get a chance to be a part of positive change in case of a social cause or get to pre-order a product that you may be selling via crowdfunding at a good price. Your campaign gives the contributors a chance to subjectively decide whether to contribute or not without any feeling of guilt.
#Myth 6 -Crowdfunding is easy
Crowdfunding is like being a CEO of your campaign. And being CEO, as we know is no joke. Yes, creating a campaign on a crowdfunding website takes only a few minutes, but making it a successful one is requires planning, strategy and requires persistence. One has to carefully think about the fundraising goal, the story, the right images and videos which is also important to tell your story, the communication strategy, etc
#Myth 7 -Crowdfunding campaigns are always successful.
The success of a campaign depends on many factors like the pitch of the campaign, effort involved in terms of publicity and marketing, the target audience and the relevance of your campaign to them, so on and so forth. If your campaign is not delivering the desired results, what you can do is, observe the weak spots and correct them to make the most out of your crowdfunding campaign!
Now that you know what are the difference between the half baked truths and the actual facts we hope your doubts are put to rest. Crowdfunding is a powerful tool, and given the right effort, you can use it to fund your next project.
To start your own crowdfunding campaign log on to Impact Guru.