Historically, finding funding for your business was a fairly straightforward business. You asked the bank, or you saved up enough money yourself. But in our digital, virtual age, there are far more funding sources on offer. Of course, the bank (or building society) is still an option, but it isn’t suitable for everyone. There are friends and family, who can be a fantastic support for your business – both financially and emotionally. Then come other options such as angel investors or crowdfunding.
“Crowdfunding is a way of raising finance by asking a large number of people each for a small amount of money.” UK Crowdfunding Association
Sometimes referred to as crowd sourcing or peer to peer lending, crowdfunding is the opposite of traditional lending. Instead of asking a few people (such as a bank) for a larger sum of money, you break it down and ask for a larger number of people to invest a little. This makes your investment much more accessible for everyday people, not just major investors with big sums of money.
Crowdfunding can be very relevant for not for profit organisations – where people will be willing to invest because they believe in the cause that you are trying to promote. Examples of this would be charities or local community initiatives such as theatres or important geographical areas such as green spaces.
For businesses and not for profits alike
Crowdfunding can also be suitable for commercial businesses and there are many success stories to gain inspiration from. These are usually equity crowdfunding initiatives where businesses give away shares or a small percentage of their business in return for the investment. It can also take the form of debt crowdfunding, where investors receive a financial return on their investment – like interest on a deposit. UK success stories include BrewDog who raised funds for the world’s first ever crowd-funded brewery and accounting software company Free Agent who raised funds to drive product development.
Crowdfunding is now a major industry and there are a plethora of crowdfunding websites to choose from including Kickstarter, Seedrs and Go Fund Me.
If you do decide to pursue the crowdfunding route then make sure you do your homework.
- Look at the types of projects each platform tends to attract and whether it fits with your project.
- Think carefully about how much investment you are looking to raise and what you are (or are not) prepared to give away in return, so you can select the right type of funding.
- Spend time creating a killer pitch that really convinces people why they should invest.
- Publicise your project as much as possible to gain maximise profile and take up.
Our highly experienced virtual assistants can help you research crowdfunding options, write persuasive pitches and promote your project across social media to gain maximum exposure.
Please get in touch on 01483 332220 or email us at email@example.com to find out more about our nationwide virtual assistant service. We pride ourselves on being the staff you don’t see, but the difference you do.