hugh anthony, certified lifestyle speaker · author · lifestyle coach
Recently, I facilitated an event in Toronto where a filmmaker screened his film as part of an UN International day and shared his experience in producing the film during a Q&A session with the audience. A question was asked if there will be follow-up series, and the filmmaker apt expression was, yes. Having listened to his response, I then realized the project was a labour of love, so I suggested to the audience that they should join the effort to raise money through crowdfunding by making a donation through a non-profit organization.
Traditionally, entrepreneurs, innovator and professionals had to go to a bank or a lending house to get capital to start their businesses. Historically, businesses have thrived through cooperatives and non-profits the world over for ethical, social and economic ventures; and of course, family and friends providing seed money for that entrepreneurial venture. However, an augmented platform has emerged over the last decade that leverages technology and people; crowdfunding. It is now being hailed as a creative funding model for financing numerous start-up ventures.
Crowdfunding is the raising of funds through the collection of small contributions from the general public (known as the crowd) using the Internet and social media. The key to success says Catherine Clifford is to capture people’s attention and curiosity. The filmmaker’s response embodied the aforementioned, along with their interests.
There’s a growing community of people who want to support projects and ventures for ethical, social and economic causes; and will invest in them on popular sites like Kickstarter or Indiegogo, to name a few. For investors, steps have been made to have legislation in place for equity-based crowd funding, where entrepreneurs, innovators and start-up ventures are able to raise capital by selling a piece of their company online in exchange for cash in the US and Canada.
“There’s no denying that crowdfunding represents a fundamental change in the way that technologies, products and entrepreneurs are evaluated.”
Scott Steinberg, Author, The Crowdfunding Bible
In thinking about your idea, project, start-up or venture, as an innovator, entrepreneur or sociopreneur you should give consideration to the donation model you would prefer given the varying models of donation with crowdfunding, for example:
i. No Return for the Money Given Model – the project has ethical value and is good for the community.
ii. Pre-Order Model – Pre-buying of the product for later delivery.
iii. Reward-Based Model – Augmented value or perceived satisfaction but no ownership.
iv. Equity Model – The expectation is to receive dividends or investment appreciation.
See YouTube link http://www.youtube.com/watch?v=8b5-iEnW70k
Crowdfunding is not without its challenges (link to related article). Of note, the following are a few benefits as suggested by Mark McDonald to consider:
• You don’t have to give away control, a stake in your company, or future revenue in exchange for funding.
• Crowdfunding your idea will force you to set achievable goals and hold you accountable for meeting them.
• People love to share and tell their friends about projects they’ve backed and major media outlets tend to report on crowdfunding success stories.
Crowdfunding still requires the necessary preparatory work for the type of campaign you wish to create. Your business strategy, plans and ‘elevator pitch’ be it a YouTube video or presentation will be a critical to the success in eliciting interests that stimulates giving for your project, idea or cause.
Related Article: Ten tips for Running a Successful Crowdfunding Campaign
Raising Money Through Crowdfunding? Consider These Best Practices for Success by Catherine Clifford
The Top 5 Crowdfunding Sites for Your Next Big Idea by Mark McDonald
What is Crowdfunding? What, How, Why and When by David Khorram
© 2013 Hugh Anthony. All rights reserved.