The 12 steps EYEE programm helped you in developing a business idea through the help of mentors selected for you by project’s partners.
At this point for sure your are thinking on how to obtain financial resources for making your idea a real business.
Well, lets take a tour.
Crowdfunding is a method of raising capital through the collective effort of your network of friends, family, costumers, peers and their networks. Instead of traditional investors, the general public funds crowdfunding campaigns. Typically, most successful startup fundraising efforts receive about 25-40% of their revenue from their first, second and third degree of connections. This could include friends, family, work acquaintances, or anyone that the owner is connected to, including their second and third degree connections. Once a project has seen some traction, unrelated consumers’ start coming out of the woodwork to support campaigns they believe in.
This is one of the most flexible ways for fundraising for a variety of fields, from non-profit projects to serious investments in technology.
There are three main reasons why people unconnected to a project or business would support it:
- They connect to the greater purpose of the campaign
- They connect to a physical aspect of the campaign like the rewards
- They connect to the creative display of the campaign’s presentation
Knowing these points is extremely key to creating a successful campaign. Each campaign should contain a powerful reason behind the idea, exciting and unique rewards, and an eye-catching display. Video definitely plays a huge role in this last point, and novice film makers might want to consider taking the time to ask for assistance from an educated friend, or seeking a crowdfunding platform that assists with the video editing. In this age of the digital reign, many consumers will stop reading your campaign if they don’t connect to the video, so this is really the gateway to your proposal.
Just like there are many different kinds of capital round raises for businesses in all stages of growth, there are a variety of crowdfunding types. Which crowdfunding method you select depends on the type of product or service you offer and your goals for growth. The 3 primary types are donation-based, rewards-based, and equity crowdfunding.
- Donation-Based Crowdfunding
Broadly speaking, you can think of any crowdfunding campaign in which there is no financial return to the investors or contributors as donation-based crowdfunding. Common donation-based crowdfunding initiatives include fundraising for disaster relief, charities, nonprofits, and medical bills.
- Rewards-Based Crowdfunding
Rewards-based crowdfunding involves individuals contributing to your business in exchange for a “reward,” typically a form of the product or service your company offers. Even though this method offers backers a reward, it’s still generally considered a subset of donation-based crowdfunding since there is no financial or equity return. This approach is a popular option here on Fundable, as well other popular crowdfunding platforms like Kickstarter and Indiegogo, because it lets business-owners incentivize their contributor without incurring much extra expense or selling ownership stake.
- Equity-Based Crowdfunding
Unlike the donation-based and rewards-based methods, equity-based crowdfunding allows contributors to become part-owners of your company by trading capital for equity shares. As equity owners, your contributors receive a financial return on their investment and ultimately receive a share of the profits in the form of a dividend or distribution.
There are numerous donation crowdfunding platforms where entrepreneurs can safely ask for capital. Search and test and do not forget to give to all of us a feedback about it.