Crowdfunding is such a hot topic with many sites sprouting up offering opportunities for you to make money in exchange for your ideas, products and services.
I recently invested in a crowdfunding project for a cool electronic wallet – and am excited for it’s release. This is what you can do as well.
So how do you avoid the problems associated with crowd funding?
1. For many sites such as http://www.kickstarter.com if you don’t hit your target – you don’t get ANY of the money – so set your target low and just keep going after or select a network that doesn’t have this criteria
2. Select the right crowdfunding organization – some focus on non-profits, some movies, some are even tax deductible, etc – so select wisely
3. Make the offer irresistible – you are exchanging often something such as pre-sales, service or product for their contribution – be careful about trying to sell stake in your company as a venture capital raise until the SEC finalizes rule making
4. Create a video to engage versus just use words
Once someone has invested communicate with people that donated.
> Invite them to a Facebook community you create and keep them informed about everything – good and bad – and they love to be a part of something plus it becomes an easy share mechanism to attract more people
> Deliver in abundance so the model is win win
If you’re wondering if there any potential accounting and legal issues that entrepreneurs need to be aware of ahead of time?
> Crowdfunding isn’t designed to be a stock or capital fund raising mechanism – that is where there are legal issues. Other than that – whatever you promised – you need to deliver – based on the contribution. If nothing delivers – and the money was paid – like any traditional business model – they can come after you for it – one by one.
3 Rewards of crowd funding –
1. Living on OPM – Other People’s Money – getting your dream financed
2. Create a built in community of people that support and promote on your behalf
3. Get funding for large projects, dreams, surgeries, anything – where otherwise you wouldn’t
be able to in any other feasible or traditional way
Find out more about how to market your business, your crowd funding project or you at >>
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