Crowdfunding is one of the most lucrative ways for startups to fund their projects, which is why it is gaining a lot of popularity these days. It especially helps novice entrepreneurs in getting the preliminary capital needed to get their business idea moving and might even lead it to the fruition stage. However, that doesn’t mean one must blindly trust any funding platform as anything that seems beneficial definitely has certain risks attached to it. One must act wise enough to identify the risks of association which finds its way in with such opportunities. Below we list down some of the pros and cons of crowdfunding:
You choose how to put up your business thought for sale to the public. You get to dictate your way forward. Similarly you have control over how to market your idea and how creatively and innovatively you want it to go.
Tracking potential investors, VCs and others could be cumbersome and takes a lot of time to materialize. On top of that you first need to meet them in person, present your idea and then will there be any progress. However, when it comes to online crowdfunding, it might be a little difficult at first but once your pitch is in place you can expect results to follow soon. Read more http://www.newyorker.com/magazine/2015/05/18/tomorrows-advance-man
PRO: Customer Base
Offline hunting for potential customers especially for thriving businesses can prove to be a task. Given that you do not know people and they don’t know you, but if your business is set to be funded by an online platform, your going gets easier as you already have a group of people who believe not just in you but your product. The word of mouth proves to be the best channel to market your products especially when it comes from people who are already influenced by your offering. Click here to read more info about customer base.
When the idea is simple enough to digest an online setting can work wonders for your project, but if your business plan has a lot of complicated and intricate details or research involved then you may end up converting the initial excitement with which investors take up the seats, to worry with which they vacate the hall.
CON: Free Hand
Soon as you get the funding you may find yourself in position wherein it may be impossible for you to make fundamental changes to your project idea, if you so decide. You may even find it difficult when you get hit by delays as this may jeopardize your reputation with the investors.
If your idea is set to benefit end consumers you stand a better chance of getting funds as it is easier to empathize with such ideas and the benefits it will derive to the end consumers. However if your idea is targeted at businesses your odds are lesser.