How to finance your business through crowfunding: instructions for use

Crowdfunding or crowdsourcing is on the rise with many people starting their projects with this participative financing. This solution is currently attracting companies short of traditional financing. It is then possible to finance your company with crowdfunding. You will see in this document how to use it.

What kind of financing to ask for?

First of all, it is important to know what crowdfunding really is. Crowdfunding is a fund-raising mechanism that supports projects carried out by companies, individuals and consumer associations. It also serves to mobilise financial collaborators for the project.

For project owners, it is much more ridiculous to raise financing from traditional speakers, it is necessary to find alternative methods of financing.

Crowdfunding is based on 4 different segments: “pure donation” (which can be found in charity), “matching donations” to support projects, fundraising close to individuals for companies (equities), and collective loans between members of the public. It should be noted that matching donations and group loans are currently the most promising segments.

How can crowdfunding be mobilized?

The ability to mobilize a community around a project is one of the keys to success. To do this, it is necessary to implant “virality” around it, by reaching three essential spheres such as influence intermediaries (friends of friends among others), the family circle/courage, and finally the general public. The latter is the most difficult sphere to reach.

In order to implant virality and allude to one’s project, it is not necessary to send emails, to use social networks, to reach a wider audience.

Advantages of participatory financing

Of course, it is possible to finance your business with crowdfunding. Crowdfunding offers a better financing alternative for companies. There are several advantages, to mention just a few. First of all, it is an affordable solution for all kinds of domains and projects (web, sport, fashion, high-tech, etc.). This participative financing can also replace or complement a traditional banking option. In addition, it is used to provide funding for the first test project before a larger and more expensive deployment. The most important thing is that it enables the company to receive a useful source of funds to persuade individual investors or a bank to continue the project.

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