How to Start Your Business The Smart Way In The New Normal

The power of the crowd is revolutionizing the future of fundraising. Almost 18,000 crowdfunding projects are being created every single day, helping millions of people start and scale their businesses – why don't you spend 2 minutes here and find out what crowdfunding can do for you?

Fintech, InsurTech, Blockchain, Cryptocurrency - There are many fascinating and revolutionary technologies and innovations changing and improving people's lives every day. Crowdfunding is climbing to the hotlist, democratizing fundraising, and making it accessible and affordable to almost everyone, even for early-stage startups with no proven track record.

There are four fundamental types of crowdfunding – donation crowdfunding, reward crowdfunding, debt crowdfunding, and equity crowdfunding. We will focus on reward crowdfunding here as that's the first step for you to get started if you are looking for funding to bring your dream business or project to life. Reward crowdfunding is also a good starting point to prepare you for your next venture for capital.

Crowdfunding is the practice of funding a project or venture by raising money from many people who each contribute a relatively small amount, typically via the internet. The most successful reward crowdfunding campaign in history – Pebble Time raised over US$20million (outperformed their funding goal of US$500,000 by 4000%) supported by over 78,000 backers across the world. The Pebble Time team raised the money they needed to manufacture and deliver their products. They also gained visibility, customers, and heaps of invaluable feedback to improve their products to fit the market through the interaction with their backers.

So what can crowdfunding do for you?

1.   Get Funding

There are many ways to seek funding for your business, but most of them require track records, proof of credibility, a properly written business plan, your financial model, and revenue projection. These are all understandable requirements from the bank and financial institutions' perspective as part of risk management. I am not saying they are not necessary; however, in reality, not many businesses are ready to provide what is needed.

It doesn’t mean that the business or idea is not viable; it’s just that they are new and need support to get there. Have you ever felt tired of being asked about your track record when you’re trying to start? Crowdfunding gives you a way out. It leverages the power of community to empower you when all you have is vision, passion, and ideas. And the reason for it being so powerful is that a crowdfunding project usually just asks backers for a reasonable amount of money. By accumulating the number of backers, they can achieve funding goals and bring their dream to life.

2.   Build your brand

Crowdfunding is a mode of funding where you build your branding. You create something that has value for potential customers and offer it to them in return for money. It's not just about raising funds; the benefits are many-fold because crowdfunding helps you develop customer loyalty, creates awareness among new people who might not have heard of what you're doing, and brings an element of accountability.

You can use crowdfunding to get your name out there from a personal project you've been working on for years. On the other hand, you might be looking at launching something new in the market or need funding for capital projects that will help grow your business into bigger heights. Whatever it is, when you start a crowdfunding campaign, you'll receive feedback and a customer base of people who are interested in your work.

It's the future of business: not just about generating revenue but also about connecting with customers on an emotional level to drive them back for more. One way crowdfunding can help is by giving companies something they may have never had before - credibility among a loyal customer base.

A crowdfunding campaign offers a tremendous opportunity for you to get your name out there and build your brand - all while getting the funding you need to make it happen.

3.   Gain market validation

One of the top challenges that startups or small businesses face is the validation of their product-market fit. They do not have the budget for a comprehensive research or survey. The good news is crowdfunding can be an effective and economic way to validate if your product has the potential to be successful in the marketplace. How? Simply by observing how people react to your project: Does your project attract a lot of backers? Do you receive a lot of pledges? Is there any particular reward that is outperforming the others? Are you receiving positive comments from backers? There are a lot of ways to engage with your backers and get signs for your product-market fit throughout your crowdfunding journey. And the beauty of it is that it provides you with an excellent opportunity to test the market before committing and investing too heavily into launching a company or a product. Additionally, it will help you identify your target market and what you need to do more in order for your product line to be successful.

4.   Grow your business and get supportive customers

Crowdfunding is a great way to get your company's name out there and also raise money. You can use the crowdfunding website Lift Women for this. It’s an online fundraising platform that allows you to create campaigns, share them on social media, and get pledges from friends or strangers in exchange for rewards like t-shirts, stickers, and more. 

The best part is that the number of contributors on Lift Women does not limit you; it could be a thousand or just one person giving $100 in exchange for exclusive access to a beta version of your new product.

If you are an entrepreneur and want to start a business, or if your existing company is struggling financially, crowdfunding can be a great way to get the money needed for supplies or other expenses that might not otherwise be accessible. You'll also find potential customers out there who could become loyal supporters of your brand in exchange for some of your rewards.

Final Thoughts

Despite the promising growth, less than 30% of total crowdfunding projects worldwide are female-led. Only 20% of startups globally are female-led or have at least one female founder. There are many reasons behind the imbalance in entrepreneurship. What we do know is that in this world of new normal, we would all want to do what we can to support each other to get through the challenges. Women play a massive role in society and pandemic has hit them the hardness. If everyone of us just contributes a little more to help them thrive, the impact will be enormous. Now more than ever, we need call for unity and support for each other. Lift Women wants to invest in all millennial female and beyond, and be their safe go-to platform to connect, back each other up and cheer each other on. So let's do this together, join us now and get involved. Together we will all become stronger.

Reference:

• https://www.fundera.com/resources/crowdfunding-statistics
• Share of female-led startups 2019 | Statista
• Most Successful Crowdfunding Campaigns - The Crowdfunding Blog