As I’ve mentioned before, recently I’ve been on the lookout for new investors for BODO and have been exploring several different avenues in order to bring a new injection of funds into the company. Something that I’ve looked at closely is crowd-funding because I feel it has a lot to offer a company or people trying to raise funds to bring their ideas to fruition.
Not only is there the rather obvious funds you can bring in, funds that you may not necessarily have been able to get elsewhere, but when people have been involved in the launch and the success of a company in such a way that they are with crowd-funding, it also gives them a sense of importance and involvement, potentially creating a large, incredibly loyal user/fanbase (dependent on what is being crowdfunded). There’s that feeling of, ‘well maybe this little group of people with this amazing idea, might not have made it if I hadn’t chipped in and helped out’ and that gives many people a greater sense of satisfaction, than say just buying something off the internet or chucking a couple of quid into a charity bucket.
There’s also the independence that it offers, if per se you were to get the funds you needed from an investor, they will, more than likely expect something in return, whether it’s the payback of funds once a profit has been made, or an involvement in executive decisions that is not always welcome. Unlike a bank loan, (another option people looking to start their own business have), crowd-funding offers a freedom from high-interest repayments that can often be utterly overwhelming for start-ups and small businesses.
That’s not to say that it’s not without its downsides however, making it can take a lot of hard work and you do need a really good idea to capture the imagination of the public and convince them to part with their hard-earned cash, especially in the current economic climate which has seen many people suffer a huge cut in their disposable income. There’s also the “all or nothing” policy that some crowd-funding platforms like Kickstarter for example operate with. Some will opt for a smaller target figure than what they really need to try and minimise the risk of not making anything at all and there is also the chance that you will raise a substantial amount, an amount that could get your idea/company going places, but just fall short of that mark you need to get it all!
In saying that though, I still think crowd-funding is worth the risk and a great way for the public to get involved with those who are inventing, innovating and trying to make a difference!