If you own a startup or you’re an entrepreneur, business owner, or you have wonderful business ideas (see business ideas in Nigeria), being able to raise funds to support your dream could be the difference between becoming a fortune 500 company. Crowdfunding is a means to raise capital for most businesses and situations or causes that require funding.
What is Crowdfunding?
It is the use of little amounts of capital from many people to finance a new business venture. Using the internet has made the ability to crowdfund easier through their respective websites like gofundme.
Why Crowdfund for your Business
There are a few benefits to crowdfunding for your startup, and one of such is the opportunity it helps entrepreneurs get close to their would-be investors and customers. The following reasons explain why you should consider it for your new business venture:
- Investor Support
It provides a platform to introduce your business to would-be investors and other business associates in your field and other areas. This is vital to the growth that your business needs.
- Free Advertisement
Free advertisement is another advantage of crowdfunding. The amount of awareness that it gives your business venture while sourcing for funds is good for marketing your brand to a lot of intending contributors.
- Customers and Clientele
Apart from the free publicity that it gives your business venture or idea, it also creates a platform for prospective supporters and loyalist for your business. Through crowdfunding, customers for your services are found, which may have never been possible until later.
- Market validation
For wonderful business ideas to become successful, it must meet certain demands and needs of consumers. Through crowdfunding, your business gets to be scrutinized by investors and would-be consumers alike. It helps determine how acceptable your business or business idea is and where necessary changes are needed.
There are different reasons why you should crowdfund your business, such as its preferability to loans where you are given conditions that may be unfavourable and leave you forfeiting your business. This can’t happen when you crowdfund your business since funds from contributors aren’t stakes in your business except when investors are involved.
If you’re seeking donation and investment in your business venture, you can make use of the services of these crowdfunding sites below.
List of CrowdFunding sites
This is a crowdfunding platform for Nigerians that allows anyone to raise funds for anything, including businesses. View sites
Slourish is another Nigerian crowdfunding site that helps micro-investments achieve their entrepreneurial dreams. On Slourish, members with a good credit score are eligible to collateral-free loans. Check out slourish.com
This is a crowdfunding platform for creatives such as musicians, filmmakers, designers, writers, illustrators, performers and so on. kickstarter.com
Indiegogo is another crowdfunding site for creatives and innovative minds alike. Since its launch, it has helped many fulfil their financial dreams. IndieGoGo is available to users worldwide. View indiegogo.com
You probably must have come across crowdfunding sites like GofundMe through social media platforms. It is a platform for a series of life events such as education, celebrations or pressing medical needs. It is also used for other crowdfunding means. Click to view website
This is another donation-based crowdfunding site. It is built especially for fundraising activities which small and medium based entrepreneurs can benefit from. Click to view website
7. Circle Up
CircleUp is a great platform for entrepreneurs willing to introduce their business or company to a market. It is a great crowdfunding platform that focuses on consumer brands. Click to view website
Microventures is a crowdfunding platform for investors. It allows donations from both qualified investors and non-investors. Click to view website
How to successfully crowdfund your business
While you crowdfund for your business, you want to ensure you take the right steps to fulfil your financial dreams. The following tips will help you drive home your goal.
- Decide on your funding goal
- Have a business plan or market strategy
- Publicize your crowdfunding campaign
- Communicate effectively to donors and potential supporters
- Be transparent about the support received.
Crowdfunding your business idea is a great way to start up your business and entrepreneurial dreams. It has removed the physical constraint required to raise capital for businesses.
It is important to note that a major criterion for accessing these funds is to have your business registered. You can refer to this post for a step-by-step guide on how to register a business name in Nigeria. You can check out one of our favourite small business ideas – the mini importation business.