Key Crowdfunding Challenges a Startup Faces

key challenges of crowdfunding

If you are getting a bank loan for a business, you are not sure when will you pay back or may face bankruptcy. In case of investment angels, you lose control of your business sometimes. Crowdfunding is a better option if there is a need of financial stability.

There are many types of crowdfunding these days, ICOs are the ones trending the most as source of capital for startups.

Crowdfunding is risk-free considering the above-mentioned scenarios. No one is controlling your business and there is no risk of bankruptcy either. However, crowdfunding platforms have their own pros and cons. Comparatively, they are the best source for raising funds. Hire ICO experts for ICO development.

Don’t miss out the key crowdfunding challenges because without knowing you can’t prevent them.

1- Trust, brand credibility

When you are a brand and people know about you, it’s easy raising funds from crowdfunding campaigns.  Like Telegram, they raised billions within few minutes of their ICO launch.

Consider building brand credibility as investors are always on a look out for it. If you are not a brand, that doesn’t mean you won’t qualify for crowdfunding as it’s the idea and the whitepaper which counts the most. Investors read the whitepaper / roadmap of your startup as in what will you do after acquiring the set capped amount from a crowdfunding platform. If you have mentioned each and every detail, this will build trust too.

2- Choosing the right platform

Numerous business offerings are there with different crowdfunding platforms. Many think, more the options, greater possibilities will open up and more competition. This isn’t always true.

Ask several basic questions when you think of running your crowdfunding campaigns.

Type of visitors a platform has, number of visitors, costs of running a campaign and their set of conditions.

Some of the popular crowdfunding platforms are Kickstarter and Indiegogo.

3- Setting realistic targets

Set the right goals with a budget planning. In case of ICOs, you can set a soft cap based on startup objective, and by mentioning achievable goals. Don’t exaggerate your idea especially if you think of attracting investors. Remember the fact that, investors do have great minds and they can validate if the startup idea is real or not.

4- Generate interest of people before launch

Before launching a crowdfunding campaign, generate interest first. This is one of the biggest mistakes marketers or startup owners do. They launch a campaign without knowing if the people will get interested or not. First engage them and then launch. At least take five months in advance before hitting on a crowdfunding campaign.

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