5 Keys to Successful Crowdfunding - A Business Blog Article from KLR

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5 Keys to Successful Crowdfunding

posted Jun 18, 2014 by Anthony Mangiarelli, CPA in the Business Blog

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Crowdfunding has gained popularity in recent years for its ability to raise capital by drawing individual donations from a large band of online supporters. The concept originated in the fields of art and charity, but quickly grew to attract entrepreneurs.

In a world where technology and social media are becoming more and more prevalent, it is important to stay up-to-date on different methods that will help you attract investors via the internet.
There are five key steps to take to ensure that your crowdfunding efforts will succeed.

  1. Establish your brand and make sure the public understands it. To influence your success in such a competitive marketplace, it is important to make your story stand out. Make sure the public comprehends your approach and ask yourself if reliable third parties can approve your business or investment model. Realize the obstacles to buy-in that your company faces, and think of ways to address these issues. Make sure your company has an honorable reputation and build up your social media sites to attract a strong following.
  2. Make your internet presence known. Your website is what potential benefactors will immediately see, so take the time to ensure that your site effectively discloses the story of your company or organization. Try to strike a chord with potential investors, draw on their passions and interests. Do a Google search on your company and key executives, what are the results? If you have not already, consider making Facebook and Twitter pages.  Take a look at your competition and evaluate if there are any other ways to build up your internet presence.
  3. Carry out the necessary research and use your resources to make your website attractive to investors. Appeal to the relevant passions and interests of potential investors. Use social market analysis tools and internet data mining to pinpoint potential investors that might be interested specifically in your idea or product.
  4. Attract potential investors by sharing your aspirations and inspiring them to join you in achieving those goals. Be personable with potential sponsors and tell them your story. Investors will be interested to hear what business owners plan to achieve and why they are certain that their idea or product offers social benefits and return on investment. Be candid and admit the hurdles that are ahead of you and how you plan to overcome them.
  5. Approach local supporters. Don't overlook the fact that crowdfunding has always triumphed in the local sphere. Build relationships with your operating community and let them know about your organization and your plan for success.

Crowdfunding can merit widespread support for your organization if implemented correctly. This new method of communication will be different and perhaps difficult to adapt to, but for your company to thrive, it is vital to explore new ways to access fresh sources of capital. For more information on funding sources contact Anthony at amangiarelli@kahnlitwin.com.