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June 29, 2018
What is crowdfunding? When did crowdfunding start? How can I promote my crowdfunding efforts? These are a few questions 24-7 Press Release Newswire can help you with, as we have seen hundreds of releases about this topic on our website. Don't believe it? Simply go to Google and type "24-7pressrelease crowdfunding" in the search box (without quotations).
Crowdfunding is a method of financing a project, venture or endeavour with minimal amounts of cash from a group of interested investors. Typically this is done through some type of an online platform like Indiegogo or GoFundme, to name a couple. These platforms help bring interested individuals on both sides of the table together. And interest there is--with an estimated USD $34 billion in capital for various projects raised in 2015, according to WikiPedia.
The concept of crowdfunding uses a three pillar approach with the first pillar being the individual with an idea or concept looking for financing. The second pillar is represented by the public bodies interested in backing projects, and the third pillar is the "vehicle" or platform that acts as a "moderating body."
There is a whole plethora of projects that have been funded; from social entrepreneurship projects to vacations, weddings, and projects helping communities out in a time of hardship. The most recent example of this was a fire in Canada in an area of North Vancouver called Lynn Valley. A tragic fire took the lives of a mother and her seven-year-old son; more information about this tragedy may be found here. In this example, a GoFundMe page to raise $100k was put together to raise funds to help the surviving father and family out. The community rallied and within days over half of that had been accomplished. Details on this particular GoFundMe project can be found here.
This is one of thousands of examples where crowdfunding has a wonderful benefit. We have seen Indiegogo projects from board games to video game systems and many more raise tens of thousands of dollars for projects. The new Ataric VCS crowdfunding campaign has raised nearly $3 million dollars!
The crowdfunding process certainly goes against the grain of mainstream processes to raise business capital. Before crowdfunding was invented, a business owner would be required to put together an elaborate business plan that included the course of action for marketing the product along with research on the industry and potentially a prototype of the idea. You would then need to seek out various investment routes including venture capital firms, banks or angel investors. This method can be mentally exhausting and tiresome, particularly if you have to do a "dog and pony show" in various cities. Your audience is also quite limited, and you could wind up giving away much more of your company than you would like because funding sources are savvy and can take advantage of businesspeople who aren't as experienced. If you reach out to friends and family or your own network of people, this can be awkward also, and has an obvious potential downside if your business project doesn't work out.
A crowdfunding platform is significantly different--almost the opposite. You post your information and share your pitch on a platform only once; there is no jumping in a car to drive to an investment banker's office or hopping on a plane to visit an angel investor. You also have control of what you give away. For example, if someone contributes $25 to your first product, you may give that person the product as a reward. But your product, which retails for $200, may only cost you $10 to build.
In the crowdfunding world, there are tens of thousands of accredited investors who have access to your fundraising campaign. If they like it, they may also share your crowdfunding opportunity with other crowd funders. There are many people who are attracted to crowdfunding projects and are always seeking new projects to invest in. These people are aware of the major sites and scour them daily.
How does a press release fit into a crowdfunding campaign? As we mentioned above, 24-7 Press Release Newswire has seen hundreds of press releases related to crowdfunding.
Sending out a press release lets you leverage the reach of the media to get word of your crowdfunding project out to a much larger audience. In addition, journalists traditionally are considered credible sources of information and that will give your crowdfunding campaign a boost.
First, ensure that your promotion is set up and ready to go. Then write a short, to the point, compelling press release announcing your crowdfunding project. Once you have distributed your press release, you will receive a link to your press release that you can share on your social media. You can include a short description in your social media post with a link to the press release. This works particularly effectively with Twitter.
We always recommend when writing a press release to be honest, keep it simple (no jargon) and keep it on point. Sometimes shorter is better, particularly when journalists are inundated with dozens or hundreds of stories daily.
For further information on "How do I write a press release" check out a couple of our articles including "Five Ways to Write a Press Release for Optimal Results" and "Leveraging Social Media to Maximize the Reach of Your Press Release"
A crowdfunding platform can be a step up from traditional fundraising methods. It is more efficient and potentially offers more opportunity because of the nature of the online environment. But to really reap the benefits of crowdfunding, it is still a great idea to promote your campaign externally through a combination of a press release and social media.