The concept of crowdfunding is amazing. Imagine dozens or even hundreds of people giving you money because they like your idea or product. Check out this video then come to one of the Crowdfunding classes we hold at Greater Phoenix SCORE to find out how you can do it for your business and how it works in the State of Arizona.
What is Crowdfunding:
Crowdfunding is going straight to your audience through the Internet pitching your idea. The challenge is to connect directly with your audience. Having a social media following helps with this aspect.
You need to make it sound awesome and don't ask for charity. Now, there are nonprofit organizations who have used crowdfunding successfully. There you need to "tug at the heartstrings".
The most important step is the follow-through. If you make promises or offer a perk, you need to deliver on it.
For example, a local chihuahua rescue nonprofit needs $5,000 to expand their facility. They've been in existence for over a year and have grown a following on Facebook and Instagram posting cute videos of the dogs. They start a crowdfunding campaign and promote it not just to their current fans, but to dog lovers everywhere with videos. In this case, as an established nonprofit, yes, they can ask for money and not give anything in return. Or they can offer free adoptions or services to locals.
It's different when it comes to a for-profit business and that's why you need to educate yourself before you launch a crowdfunding campaign so you don't break a state law, look foolish, come across as a scam or waste your time.