Asking for money can be intimidating or just uncomfortable for some people. But what happens when you truly have a good cause and you want to get the word out and to gain financial help? Crowdfunding!
The word crowdfunding brings so many thoughts to the mind like: The big YES, because you know your financial burden is going to be relieved by a crowd, and the big “Uh oh” that comes with the discomfort of asking people for money and getting them to believe in your worthy cause!
Let’s start with the basics, Crowdfunding, according to Jonathan Berk, the New England Director of Patronicity, and Impact Hub member, is defined as:
There are different types of crowdfunding, primarily: Equity crowdfunding and reward based crowdfunding.
Equity crowdfunding involves the backer receiving shares of a company in its early stages in exchange for the money they are injecting into the business _ pretty involved I must say! But might be perfect for the right business. (I would like to hear from you if you have tried this.)
Reward based crowd funding, which is the more popular one with less dynamics, involves entrepreneurs pre-selling a product or service to launch a business concept without incurring debt.
How to get started:
An easy way that many people like to begin is via donations from friends and family. Myron Lam and Lin Tran of X.O.I Gac fruit juice explained that as they were starting their company, to win a grant, they had to raise $25,000 through crowdfunding. Myron and Tran swear by the support of their Vietnamese friends and family, who believed in their dream of empowering Vietnamese farmers, while sharing the Gac fruit’s nutritional benefits with the world. There is indeed no safer haven than the one from friends and family.
Lauren LeBlanc, the Development and Communications manager at Komera, and an Impact Hub member, further emphasizes the importance of not just beginning with friends and families but also finding believers in your dream and taking them on as advocates to help spread the word. The Komera team does this through their Annual Global Run where they help raise money to empower Rwandan girls via education, community and sport. Race participants create a page explaining their reason for running the race and call upon their circles to contribute or donate to the cause. They are the perfect advocates to help spread the word.
Patronicity takes it a notch higher. Jonathan Berk further explains that their team helps projects that have hit their funding goal receive a matching grant from the sponsoring partner, adding further incentive. They have dubbed this process crowdgranting.
Tip: Find believers in your dream and take them on as advocates to help spread the word.
Lauren LeBlanc, Komera
- Before taking on crowd funding, preparation is key. Different projects require different techniques, so understanding your business or project and its target market is important. Do your research and have a strategic plan.
- Pick your platform wisely. Some are reward based platforms while others are equity based so make your pick!
- Tell your story in a compelling way with the support of pictures and videos for a better understanding of your vision. Try to be mindful that you are telling a story on a platform with 100 different stories, so how can you standout?
- Prepare a database of contacts beforehand and let them know when you will be launching your crowd funding. Having initial strong support helps accelerate the project and gives it good pace with even more outreach.
- Get started, but set a deadline as it creates a sense of urgency. But mostly do not fret or give up as most funding comes in at the beginning and towards the end of the cycle!
Happy searching for that money!