Crowdfunding has been a topic of lengthy conversation amongst my business comrades for years. I have been involved in a few successful reward campaigns in the media and entertainment industries. But over the last quarter, while readying two new companies for a loud, public and organized business launch, we decided to include both reward and equity crowdfunding in our launch plan. After diligent R&D [that's rip off and duplicate ;)], I have come to a new understanding of just how significant crowdfunding is and its value to the world of business AND the world at large.
Seeding and Growing a Business Requires Capital
Because crowdfunding makes it easier for female entrepreneurs to raise money, crowdfunding has done what no state or federal law and no equality campaign has been able to do, it is closing the Gender Gap without even trying. According to Crowdfunding Insider, women-led businesses get a paltry 4% of SBA loans and 7% of venture capital investments, but a whopping 34% of online capital goes to women-owned and led companies. As a person who has sought capital for both start up and growth purposes over the past 30 years, I've utilized all the traditional funding methods: savings, family + friends, credit cards, angels, lines of credit, customer capitalization, and venture capital. Utilizing a tool that combines funding, marketing, and customer acquisition? Pure genius. In fact, I've found friends, family and angels are investing more and more through crowdfunding platforms, resulting in clearer and cleaner business relationships between funders and fundees.
Crowdfunding is a Tool
Much like marketing plans, conferences, news releases and social media, crowdfunding is a tool. Each of these tools is used for the same overarching purposes: To reach the right people, with the right message, at the right time. That may not sound sexy or easy, but it can be fun and effective when properly deployed.
I always set milestones that are attainable. One spectacular tactic is to tee up your friends, family, and fans BEFORE your crowdfunding launch date. Ask them to commit an amount to fund your campaign on the DAY you launch. Expectations vary; my target is 30% of goal. Reaching that milestone is cause for a celebration. Pop the champs! These tools aren't new. You may have been crowd sourcing for years and just didn't know it. I have.
I created "Meet the New Media" forums as a marketing tool to build my public relations company. For fifteen years, this tool continued to produce valuable clients, relationships and insight. The purpose of the event was to help business folks gain knowledge and skills necessary to get free publicity. I brought in a panel of media personalities, journalists and editors who gave advice and answered questions from the crowd, thus becoming aware of the business. Every event led to numerous print and broadcast stories and about 20% of the audience became our clients. I could not have done this if the crowd had not sufficiently funded the event. It was crowdfunding in a circle.
Crowdfunding is a Magic Wand
Many early adopters looked at equity crowdfunding as a magic wand that would solve all problems. They learned the hard way that a magic wand is useless if you don't know how to use it. My sincerest gratitude goes out to those who went in early and worked out these inevitable kinks because now there are fewer companies competing for the money. More importantly, as a business leader who has worked to understand how to use the magic wand, I have the opportunity to raise more money than ever before. Why? Because I know that there really is no magic in a magic wand. Like Dorothy's red shoes, the magic comes from trusting yourself, having a plan and DOING IT!
ABOUT THE AUTHOR
Rebecca Antonelli is the founder of the Center for Creative Marketing. She coined the phrase, "The world is not changed by what you THINK. The world is changed by what you DO." She's been on the start-up team of 32 businesses and has helped thousands more grow through innovative start up + marketing strategies. She specializes in new business, product + service launches, working in diverse industries from Technology to Media and Healthcare to Specialty Food. For the past 25 years, she has strategized from 10,000 feet all the way down to the step-by-step execution. She works with inventors, association executives, entrepreneurs, retailers, marketers, government agencies and students as a trainer, consultant, event + promotional strategist. Get Rebecca Antonelli's free email template to recruit your crowdfunding campaign supporters here.