These funding sources happened to be angel investors, venture capital firms, and banks and this really limited the options to just some key players. People viewed this fundraising method in the form of a funnel where you along with your pitch remained at the wide end whereas your investors remained at the closed end. When you failed in funneling at the appropriate firm or investor at the correct time, then you could see the loss of your money and time.
On the contrary, crowdfunding platforms transform the funnel on-end. It provides you a solo platform for building, showcasing, and sharing your pitch resources. So, it can be said that this approach streamlines the customary model. Earlier, people would spend many months in sifting via their personal networking, selecting potential investors, and spending their money and time. But, with crowdfunding, things have become pretty easier as people get a chance before interested parties and provide them many ways to aid in expanding their business.
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How Investors Get Benefitted from Crowdfunding?
Numerous crowdfunding projects happen to be rewards-based and investors might get to take part in the launching of a novice product or get a gift in return for their investment. Equity-based crowdfunding is gaining huge popularity as it permits a startup company to raise money minus taking help from the venture capital investors.
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Benefits of Crowdfunding
Crowdfunding is more effectual than old-style fundraising – In comparison to seeking out for accredited investors or hunting for a loan, when you set up a positive crowdfunding campaign, then it turns more effective and efficient in conveying your message to the ideal people.
Crowdfunding is a place of building traction, proof, social, and validation – When there is a highly visible and strong crowdfunding campaign, then you can chart your path forward.
This is an opportunity for crowdsourced brainstorming for refining your idea – The greatest benefit of crowdfunding is it gets closer to your customers, thus, proposing you with an opportunity to get engaged and field questions, feedback, ideas, and complaints.
Crowdfunding gains people loyal advocates and early adopters – Individuals who power the social proof your ideas happen to be your potential brand advocates and early adopters. They trust your story, service, and product and these adopters become vital for your crowdfunding campaign’s success.
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