Crowdfunding is the latest and greatest way to raise money for a new business, or even a new product or service you want to launch.
But importantly, Crowdfunding offers a ton more value than just the initial funding it provides, pretty much making it a no-brainer for entrepreneurs to use.
Before I get to the “hidden benefits” which make Crowdfunding so valuable, I need to provide a little background on the concept of Crowdfunding.
The most popular type of crowdfunding is what I call rewards-based crowdfunding. Rather than giving up equity, in this type of crowdfunding, entrepreneurs give rewards. These rewards are typically future delivery of their product or service.
Let me give you an example.
Let’s say you have an idea for a product that you expect to sell for $50. And that if you had funding now, it would take you six months to build and ship the product.
So, today, you get 5,000 people to pay you $40 for it (a 20% discount).
You would then take the $200,000 (5,000 X $40) and use it to develop your company infrastructure and develop and deliver the product.
As you can see, rewards-based Crowdfunding is essentially pre-selling your product and typically at a slight discount to make it worth the “investor’s” while.
So it should be clear now 1) what Crowdfunding is, 2) what rewards-based Crowdfunding is, and 3) that it can effectively be used to raise funding for your business.
Now, while getting funding for your business is great, I want to give you the 5 other key benefits that Crowdfunding offers entrepreneurs like you (because I think they’re equally if not more powerful):
1. Market Research
Pre-selling your product is incredible market research. If people buy it, then your marketing message is on target and there is a real need for your product or service.
If people don’t buy it, then maybe a market doesn’t exist, or you need to adjust your marketing message or target market.
In any case, getting this market research BEFORE raising or trying to raise a ton of money is invaluable. It allows you to test whether you have a winner before going through this process.
2. Built-in Customer Base
When you get others to fund you via rewards-based Crowdfunding, you build a customer base. If you provide a good product or service, these customers will be prone to buy more products and services from you (the same products, upgrades and/or new products you develop) in the future.
3. Case Studies/Testimonials
In today’s world, with so much information and opinions, it’s hard to know who to trust. And at the top of the list of who and what we trust are the testimonials of our friends and others.
So, by getting testimonials from the customers you gain from Crowdfunding (assuming you delivered them the product/service and they liked it), you can influence more customers to buy from you.
Likewise, if your offering permits, by offering “before and after” profiles of your customers, you can develop Case Studies which influence future customers to buy from you.
4. Word of Mouth Marketing
People who fund your company will tell their friends about it. Particularly if you make them feel like founders/initial investors (which you can easily do via email and on your website and/or via direct mail).
Played correctly, Crowdfunding can result in thousands of customers, most of whom can tell numerous friends and colleagues about your products and services. This word of mouth marketing can be worth millions of dollars.
Local media sources are enamored with Crowdfunding as it’s new and unique. As a result, countless entrepreneurs who have raised Crowdfunding have been profiled in local newspapers, radio shows and TV broadcasts.
So, with little legwork, raising Crowdfunding can get you lots of PR.
In summary, Crowdfunding can give your business a ton more than just funding. It can give you a massive marketing push and advantage that can ultimately lead to your company’s success.
Want Crowdfunding for your business? I developed a simple-to-follow program called “Crowdfunding Formula.”
The program is a series of videos I recorded that walk you through each of the 14 steps to raising rewards-based Crowdfunding. Many of you have already joined the program and raised money.
If you haven’t, click here to get Crowdfunding for your business now!
Raising money from Crowdfunding is so much easier and faster than traditional sources of funding like venture capital and angel financing. In fact, I recommend that most entrepreneurs raise money with Crowdfunding first, start growing their companies, and then approach venture capitalists later for additional funding (at which time you will be able to give them much less equity since your company will be more valuable).
And, as you learned above, Crowdfunding will give you far more than money to launch your business, product and/or service.
How to Get Funded in 90 Days or Less
If you need funding fast, you have to use Crowdfunding.
1. It’s fast. You’ll get the money in just 90 days or less.
2. It’s easy. You don’t even need a business plan – you can get started right away.
3. You keep ALL the money. It’s not debt, and you don’t you don’t give up any ownership in your company either…