Before you can even think about crowdfunding, you need to understand the basics! This section of the site – Crowdfunding 101 – will guide you through to ensure you understand what you need to think about before launching your crowdfunding campaign!
What is crowdfunding?
For a start, it’s not free money! There is no such thing – you will need to work hard to prepare for crowdfunding and during your campaign to raise funds.
Peer-funding, micro-funding, fan-funding are other terms used to describe the activity conducted online where a collective of individual pledge or donate small amounts of money towards a common goal. By promoting campaigns through friends and social media channels, it is possible for project creators to spread the word outside their own networks and raise funds for a variety of projects, causes or business ideas.
What kind of projects can be crowdfunded?
There are millions of projects crowdfunded each year with a variety of categories. You can read more about types of crowdfunding and funding models here that will help you understand more about the current landscape.
Reward-based crowdfunding tends to fall into different categories that are as diverse as the project creators. They may be covering visual arts, music, film, writing, journalism, technology, fashion and sporting endeavours. Crowdfunding is used to launch business ideas, for causes, fundraising for charities and to change the world for the better. Crowd sourced equity funding will – we hope in Australia – enable start-ups to access more early stage funding as part of their development. Equity crowdfunding has certainly created many opportunities in New Zealand that gives Australia some data to mine when regulating in our market.
If you wonder if your project is suitable for crowdfunding, then do some research in your category. Crowdfunding can be really useful to establish pre-orders on a product, raising money for initial production. A successful crowdfunding campaign can prove a product idea or merely tap into the social hive.
Remember that the success of your crowdfunding project is all in the preparation and planning. This is the stage that shouldn’t be rushed to ensure that at launch you are ready for the whole campaign.