By Ariel Hyatt
Most of us have some type of dream swimming around in our heads. Whether it’s an entrepreneurial pursuit or a new book idea, you might find yourself caught in the frustrating limbo of having big plans, but no foreseen vehicle to launch those plans. Without funding, you either can’t get your idea launched at all, or if you can, a great deal of quality gets sacrificed in the process.
The sad reality is so many go their whole lives without attempting to make their dreams happen. How can you focus on dreams when your current life requires every bit of your time and financial resources? What’s the best way to build support and funding before you have anything to sell?
Increasingly, people are turning to crowdfunding as the first critical step to get their product or idea off the ground. Crowdfunding is a financial campaign that is run mostly by using social media. It’s been utilized frequently in the music industry, for example, by bands who already have a fan base but want to release music while maintaining full creative control.
Turning their backs on the big music companies, and more specifically, the big music companies’ money, they are engaging their fans in new ways and using them as investors in their upcoming projects. By engaging their fan base to act as a multitude of mini-investors, they have the freedom to create their music without swimming in a sea of red tape and contract obligations. It creates string-free artistry.
Crowdfunding is also how movies like Veronica Mars are made, getting its cult following to open their wallets and financially back the film. When it’s done well, it creates a mutually beneficial relationship—movies get the funding they need for production and fans revel in the idea they made it happen. Both parties leave the table with something they want.
What Are the Benefits of Crowdfunding?
One of the biggest benefits of a crowdfunding campaign is having full control over the scope of your idea and campaign. You have the freedom to build a platform around your dream so that you can gain followers, pitch your ideas, and eventually convert your fans into investors.
It’s a bold departure from the stuffy board room presentations where potential investors are thoughtfully selected and meetings obtained in the hopes of convincing a few people to give you a lot of startup money. In fact, crowdfunding is built on the exact opposite strategy. Rather than asking a few people for a lot of money, you are now targeting a lot of people for smaller investments. And you aren’t reaching out to the financial and business elite, you are using the power of social media to build your following from literally anyone who is interested. The results can be amazing.
Can Anybody Launch a Crowdfunding Campaign?
Absolutely! But before you recklessly launch a campaign asking people for money (and cross your fingers that they do), there are some things to thoughtfully plan out. The stark reality is about 60 percent of crowdfunding launches fail to meet their goals. So just like anything in marketing, crafting a robust plan of action—one that engages people and keeps them engaged—is an absolute must.