3 Good Reasons For Crowdfunding (Besides The Money)

Published on:

When thinking about raising money for your startup many opportunities come to mind. Crowdfunding is not always the first one - that's why we put together 3 good reasons to make use of the crowd!

You need money. You keep hearing about crowdfunding. Put 1 and 1 together. I’ll start my own campaign. Makes sense. But if you think about it a little more: months of preparation, a professional video, a team and that crowd funders in Austria are – not yet – reaching funding goals of 100,000 EUR or more. How much money will you realistically have after paying for all of that?

Having said that I think everyone starting out a new business or releasing a cool new project should do a crowdfunding campaign. But you should do it for the right reasons and with realistic expectations.

Crowdfunding Will…

#1 …Test Your Market

During the crowdfunding campaign you will see if people actually want your product or service. Will they actually pay for it or are they just cheerleaders for your startup? Can you reach your audience? Maybe your product is awesome, but you haven’t yet figured out where to find your perfect customers.

Maybe 50 people are super excited about your product, but there aren’t yet enough customers to support your planned business.

When you have your committed customers who preordered your product via crowdfunding, you know that they are more than just interested in your product. You know what they want, what price they’re willing to pay, the size, the color, the material they want. This gives you a huge advantage when ordering or producing your first product.

#2 …Create A Loyal Customer Base

Not only do you find your first customers more easily via crowdfunding, you have the opportunity to include them in the development from the very beginning. If you use this potential, your customers will tell you what they want. Furthermore they will be more likely to buy from you again, because of the connection on a personal level. And the best thing: they will be your loyal ambassadors helping spread the word for you. Those relationships will serve you far beyond the crowdfunding campaign.

#3 …Open The Door To Influencers

It is hard to get people’s attention. Crowdfunding is a great way to contact bloggers, press and other influencers to ask them to write about you. It helps your crowdfunding campaign to have press coverage and is valuable beyond the campaign to have significant relationships with bloggers and other media.

If you are just in it for the money you will lose.

The ROI for the funded money is horrible. Considering the time you have to put into solid planning of the campaign and marketing budget. You may also be paying professionals to help you before, during and after the campaign such as designers, consultants or professional shipping services.

So to sum it up, if you are in it just for the money… forget it. You will be disappointed when you check your bank account after you delivered all your perks and paid your team, taxes and platform fees.

But you can also look at it from another point of view. As a payoff for the months you invested in your crowdfunding campaign you:

  • know now what people want
  • get name recognition
  • have proof that there is a market
  • can produce without risk (if you did your homework well)
  • have a reputation in your niche with press and other influencers
  • have loyal customers that are likely to buy from you again
  • are more likely to get funded by external investors

AND you made money on top of that! How cool is that?

Don’t miss the 5 biggest crowd-funding mistakes & how to avoid them!


Sharing is caring so please share this post. Thank you!