Not long ago, most of the companies existed only physically. Now more businesses exist online than ever before. In 2017 eCommerce earned $2.3 trillion in sales, and the sum expects to go up to $4.5 trillion in 2021.
The question is, how do businesses and start-ups make money? How do these companies get financing online?
According to How to Fund a Business – Guide, Crowdfunding is one of the options preferred by digital companies, since obtaining funds is done collectively and from a digital point of view. Companies or small businesses can participate through web platforms and follow the financing process at all times, publishing relevant project data or updates of interest that attract more investors.
What is Crowdfunding?
It’s the collective financing based on support, by which an online company or any business can get the money they need. Crowdfunding, as the name suggests, is a way of generating capital. Multiple sources send money online. Musicians, models, and film-makers use this platform to get the investment needed.
Have you ever thought about creating your crowdfunding platform?
To do that you have to:
Think about the niche market
It is an essential thing in the whole process. There are countless platforms in the market, besides there are several types of crowdfunding. It is quite a complex and diverse sector, and that is why you should first consider who the focus of your platform is? Who is your target? Who is going to host your project on your platform? And who is going to invest in it?
You have to analyze the niche and type of project you are accepting on your platform. Analyze thoroughly the needs of the sector in which you are entering to be able to choose the option that best fits.
Create a good team
You need an excellent initial team to start and run the platform. The partners involved should be critical thinkers, creative, and practical. You will hear this advice typically in a conference of entrepreneurs, and it’s entirely true.
Surround yourself with people who can understand that setting up a platform is something severe that requires effort and dedication. You cannot operate the platform if you don’t have a good team. There are no self-managed crowdfunding platforms.
Kickstarter, the world’s largest and most popular reward crowdfunding platform, has 156 people behind it. There can be no better example than their case of how talented a team is.
Quality is mandatory
Ten years ago, the variety and analysis of the projects was an extra that few crowdfunding platforms offered to the plans. Today, if you do not provide this, your platform will surely not last long.
You must build a workflow for project validation. Provide due diligence and advise promoters regardless of the type of crowdfunding and the niche you decide for your platform.
The success of your platform’s campaigns depends mainly on the involvement and the seriousness of the projects and their promoters.
There are two distinct options: choose to make your crowdfunding platform by assembling a team of in-house developers or outsource the technological part of the business.
The market reality is that there are no open-source or free solutions good enough to start your crowdfunding platform. The most suitable and scalable option is to look for a crowdfunding agency if you’re unable to run a crowdfunding program yourself.
It is also essential to consider the different payment gateways depending on the type of crowdfunding. Remember that if your platform is an investment, you need a more specialized system.
Pamper your creators
The work of helping creators and promoters does not end when they finish their projects. The platform must provide tools so they can manage and evolve their plans. One may think that a project is limited to an X-day crowdfunding campaign, but it is not. There is a pre-campaign, campaign and post-campaign process, community management that has generated through the platform, documents, rewards to be delivered, investment returns to control, mailing, etc.
Create valuable tools for your creators and attract them to your business. Remember, those creators can repeat and launch more campaigns on your platform.
Analyze the data
Once you have created your crowdfunding platform, always keep in mind that one of the essential values of your business is data. You can do a lot of good things if you have information about projects and people interested in investing or being an ambassador for these projects. With this information, you can perform marketing actions, improve the quality of your platform, offer new services based on the needs of your users, and much more.
The key to the business is to be aware of the dynamics of the market and your platform through the constant review of information and feedback.