If you have a great idea for an invention that you want to turn into a business, obtaining the finance to get it going may not be easy. This is where crowdfunding may be able to help.
Crowdfunding involves securing small individual amounts of money from large numbers of people in exchange for rewards, such as discounts, special invites or freebies. It can provide a great way to get a project, campaign or business venture off the ground, and may certainly be preferable to trying to convince a financial institution to lend you the money – especially if your idea is a little unusual!
Crowdfunding is usually done through dedicated websites such as Oz Crowd, KickStarter, Indiegogo, Pozible and others, in exchange for a fee.
Crowdfunding is no walk in the park however. The trick with it is to so inflame other people with your idea or project that they are willing to become a backer and invest in it. This requires relating to and engaging with your audience, promoting your project or venture through videos and other media, and posting updates as you go. Many crowdfunding sites provide tools to assist with this.
Australian success stories
Flow hive for beekeepers:
The Flow hive was developed by a father-and-son beekeeper team in Byron Bay who wanted an easier way to harvest honey, and so came up with the idea of a device that provides honey ‘on tap’ without opening the hive and disturbing the bees.
Their funding goal was $70,000, but news of their invention went viral and they ended up raising over $12 million from backers! Manufacture is underway and a complete system can now be pre-ordered for delivery starting in March 2016.
Not too many people enjoy trying to spread refrigerated butter onto their toast, and this project involved coming up with and developing a knife that grates the butter and in the process aerates and softens it for spreading. Clearly this struck a chord with people, because the project ended with over $360,000 from 15,000 backers, despite having a goal of only $38,000! ButterUp is now established and is delivering its product – retailing for around $15 – to countries all around the world.
UAMP headphone amplifier:
The UAMP is a tiny amplifier that delivers premium quality sound when using headphones. The goal for this venture was $15,000 but it achieved almost $297,000 from more than 3,600 backers. The product was due for launch in July but has suffered some delays and is expected to be available in October 2015.
While crowdfunding can have a kind of ‘fun’ edge to it, it’s still very important to present your business venture in a thoroughly professional light.
Part of this involves communicating well with your backers, especially since they are investing their money in your idea and entrusting you to deliver. This makes regular updates essential to keep them posted on how the venture is faring.
As an example, if your product has been delayed as in the case of the UAMP above, it’s vital to communicate what is happening or you may end up with some irate customers. This can be done on the crowdfunding site itself, or through other means such as email, internet fax, email to a fax number, or social media.
So if you have a great business idea but are lacking in the necessary funds to get it off the ground, you might want to consider crowdfunding as a way to get the ball rolling! Share on Facebook Share on Twitter Share on Google+ Share on LinkedIn