Crowdfunding is the process of getting a large crowd of people to each pay a small amount of money to invest in an idea or product, typically with a tangible incentive and the promise that when the idea comes to fruition, they will get first access to it.
The key is to engage people in your idea, be able to convince them to invest and then get them to share the project because they want others to know about it. Make sure it's easily shareable on social media. Networking? Definitely. An audience — fans, followers, customers — can talk up your crowdfunding campaign. Without a built-in audience, you are unlikely to raise the money to fund your campaign.
There are many ways to set up a crowdfunding project:
Some important things to understand when trying to raise money through crowdfunding:
When crowdfunding works, significant amounts of money can be raised. The process can net low-cost publicity and buzz for a product or business. You may build a rabid social media following and an excited and vocal base of customers who want your company to succeed. It helps to have a breakthrough technology or a breakthrough use of an existing technology.
The hope, of course, is that somehow just being on Indiegogo or Kickstarter will mean thousands of moneyed people will find your project because they're browsing the platform and they'll decide to give you money. But crowdfunding is hard work — crowdfunding platforms are not guaranteed sources of funds. They're simply a more efficient way to reach many potential backers than meeting them one at a time.
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