The Crowdfunding Process

Entrepreneurs seeking crowdfunding put in a lot of work for it to be a successful campaign. If improperly planned and executed, a crowdfunding campaign will not mop up the required funds. Crowdfunding campaign experts have valuable inputs about the crowdfunding campaign cycle which businesses will do well to pay heed to.


In the first stage, in the buildup to the campaign the business plan or model of the business must be very clear, with little or no room for ambiguity. This can be done by having a lean startup launch where you find, execute and validate the business idea. The findings of doing this will help decide whether the product/process will attract investor attention.

The second stage involves basic protection of intellectual property. It is expensive for startups to get a proper patent but they can apply for a provisional patent. The risk of having your idea copied is real but should not deter the business from crowdfunding.

A strong social media strategy is important for a successful crowdfunding campaign. Businesses need to reach out to peer/interest groups and share to invoke excitement. Social media engagement pre-launch ensures a larger subscriber list who business owners can ask to contribute to the crowdfund campaign.

In the fourth stage of a crowdfunding campaign attention must be turned to Public Relations. A media kit that comprehensively captures the business idea, its return on investment (ROI) will help increase public awareness as this can be shared with newspapers, magazines, blogs and other channels of information dissemination. Sample products can be shared with media professionals. Material that is published can be shared on the crowdfunding campaign page as a resource to build credibility and trust.

It is important that businesses seeking crowdfunding make sure they are on the top of the mind of their current contacts. Email, telephone calls, social media outreach are important in ensuring that the campaign is ready and can be invested in. This is the fifth stage.

In the sixth stage businesses can enlist volunteers who will speak to and encourage more people to invest in the crowdfunding campaign. These volunteers will help drum up more support for the campaign by spreading the word, helping post updates and in becoming future prospective campaign investors.

Website updates for the various stages of the crowdfunding campaign constitutes the seventh stage of the life cycle. During the pre-launch, the website needs to have a strong landing page with the idea, testimonials, articles if any to capture email addresses. The website has to redirect all traffic it attracts during the campaign to the crowdfunding campaign stage.

On completion of the campaign, the website can continue to collect customer contacts and feedback for further campaigns down the line, in its eighth stage.

In the ninth stage of crowdfunding, businesses should provide updates, reply to customer feedback and showcase their business story. This is important, since many investors seek to be part of the process and seek information about how product development is advancing. They need to feel they are still part of the business process and not just fund providers.

Choosing a Platform

Running a crowdfunding campaign is a time consuming effort that involves research of the various platforms, their fees and a clear understanding of the services that they offer. Potential crowdfund raisers would do well to research different platforms and observe their service quality and which platform fits them best. Choosing the right crowdfunding platform is important for future fundraisers; this means the relationship with the platform must be seen from a long-term perspective.

The Crowdfunding Market

Crowdfunding was initially used in creative projects but its scope has changed in recent times. The world crowdfunding market is expected to grow by $196.36 billion between 2021-25, at a CAGR (Compounding Annual Growth Rate) of 15%. China, America, Australia and Europe are emerging as the new crowdfunding hotspots. It is being used to fund technology projects, publishing and real estate.

Next we will look at Crowdfunding in Real State Investments.

Checkout CrowdStreet, a real estate investing platform that gives investors direct access to individual commercial real estate investment opportunities.