How Online Funding For Startups Can Accelerate Your Growth

Online Funding

One of the pivotal elements for a successful startup is to obtain sufficient funds. And crowdfunding has gained immense popularity among startup founders due to its umpteen advantages. All you need is to sign up with a premium online funding for startups platform, list your project, its fund requirement, and few other options- you are ready to go!

That said, as advertised in a marketing campaign it’s not that easy to procure funds via crowdfunding sites, a strong and potent strategy is needed. There are two renowned types of crowdfunding for startups (discussed later in the blog). Let’s dig deeper to know some hidden facts and figures to consider before opting for crowdfunding:

  • Plan your crowdfunding campaign in 11 Days

A triumphant crowdfunding campaign needs myriads of factors including design, layout, planning, strategy, and effective marketing collateral. Plus, it requires the campaigner’s dedicated time and effort. However, the mistake often committed by the campaigner is they start the marketing of product/services one month before going live on the site. But if the crowdfunding site is popular the campaign will stay for 3-4 days only and replace it with the new attractive one.

So, to remain at the top on the site ensure your campaign is alluring to the investors.

  • 40% funds Are Raise Within First Three Days

If a campaign acquires its 30% funding in the first week of the launch, it is considered a successful campaign. To add, this factor compels the campaigners to share their project on other platforms also to arouse public interest and meet the financial goal. Additionally, if the campaign is failing to captivate the audience it may never get the required money.

What Are The Leading Types Of Crowdfunding?

There are plethora’s of crowdfunding for startups with their unique goals. Reward-based crowdfunding, Debt, and equity-based crowdfunding. Furthermore, online funding for startups via crowdfunding is different as per sites and their business models. Let’s learn in detail about the two most famous crowdfunding types:

#1 Reward-Based Crowdfunding

In this crowdfunding method, investors also called backers to donate their money in exchange for some non-financial benefits. Particularly, this method is famous for creative startup projects with some innovative products. And the backers either receive an emblem of appreciation or gifts for funding the project.

With that being said, it sounds like a breeze- post your project on the platform, proffer some small rewards, and good to go. But practically getting thousands of people to donate their money prerequisite for a startup founder is well-planned, exceptionally executed fundraising campaign such as:

  • At Par Funding Goal

In advance decide how much money you want to raise with your fundraising campaign. It’s a strategic decision as many crowdfunding sites operate on the model “All or Nothing”, simply put if you don’t achieve the fundraising goals even a single dollar will not be credited.

  • Excellent Reward Strategy

You hit the funding goal or you miss it entirely depends upon the right rewards and incentives. So, diversify your rewards according to donations; smaller donations ($10-$100) and larger donations ($100-more). Hence, motivate the donor to back your project without putting a hole in the pocket.

  • Reach To Crowdfunding Platforms

Be ready with your campaign material along with infomercials and short videos to attract new-age millennial customers. And most importantly rewards for the backers and go live on the crowdfunding platform you prefer to choose.

  • Indulge In Social Media

Don’t underestimate the power of social media! No matter, whichever platform you picked for crowdfunding to connect with the right audience – social media is a must. It not only strengthens your campaign but also abets in meeting the financial goals soon.

  • Money Generated, Its Reward Time

Once you hit the goals, money is credited then it’s Showtime now! Initiate the process of building the product/service you raised money for along with giving donors their much-needed rewards.

#2 Equity Crowdfunding 

Unlike reward-based funding in this type of crowdfunding, the investor gets the return on the investment. It is just like the stock market, where individuals buy the shares and redeem them when the price is high. In addition to this, it is also a popular method of connecting with the right people to get sufficient funds.

That said, the startup founder signs a contract of providing the equity to investors. Plus, if the startup fails they may have to return the funds.

Final thoughts

Since the last decade crowdfunding has appeared to be viable and super valuable for getting online funding for startups and a creative way to connect with the right people even before the launch of the product.

However, except equity-based crowdfunding, the other methods are not as viable to succors your startup business for long. Once you have acquired the money, make sure to take your business to the next level and deliver what you have promised to sustain in the hyper-competitive market.

Hopefully, now you are familiar with how to create a successful fundraising campaign that helps you get to raise money quickly.