Crowdfunding is a great way to raise funds for businesses, ventures, projects, and even nonprofits. The idea went mainstream in 2009 and since then, has grown into a market that’s valued at over US$70 billion. It’s also raised over US$530 million for small and medium business owners. The market is so lucrative, in fact, that it’s projected to grow to US$114 billion by 2022.
If you’re planning to utilize this alternative fundraising option for your project or business venture, this guide will show you how to use crowdfunding to put your business before an international audience.
Global Crowdfunding: A Major eCommerce Trend for 2020
Although the concept of using crowdfunding to pay for business expansion began in the UK in 2007, it rapidly spread to the US and now, many regions across the world are adopting the strategy. This means it’s a major global eCommerce trend for 2020. Plus, with new regulations that now allow people to invest in a variety of projects, this industry is projected to keep growing.
Though the US is now the major player in crowdfunding, there are many other countries that have embraced the market. And, even more are gearing up to use the many platforms available to crowdfund international projects. Some of the countries where there is huge potential for growth in these projects include China, Japan, and India - which also, incidentally, happen to be home to more than half the world’s population.
How Crowdfunding International Projects Can Take Your Business Global
Before you go ahead and jump into launching a campaign for your business, it’s important that you understand the best way to use this financing option to take your business global. It’s also good for you to know what all the benefits may be.
Why Should I Use Crowdfunding for Business Expansion?
It’s often tricky for businesses to raise funds for expansion, especially for small startups. Getting loans can be difficult and convincing investors to put their money behind your brilliant idea is exhausting and not always lucrative. This is where crowdfunding comes in. With one campaign, you can reach a huge number of potential backers around the world and have a higher chance of putting your business in front of people that believe in it - and are willing to invest. There are plenty of benefits that come with using public money-raising campaigns for business expansion. Some of these include:
- Validation: By gauging the response to its project, a startup can figure out if the general public will embrace the product(s) it’s about to offer them.
- Increased Value: This is especially if you’re offering your product to your backers as part of your campaign. With these beta-testers using and talking about your project, there’s a chance to increase your potential customer base, quickly fix any problems that may arise. All of this, of course, adds value to your business.
- Minimal Risk: Unlike the high risks that come with bank loans, raising capital through crowdfunding is a very low-risk prospect - you don’t have to put anything up as collateral.
- Generate More Funds: When you apply for a loan in a traditional setting - like a bank - you will never get more than the amount that’s originally agreed to. However, with a public funding campaign to grow business, you have a far higher chance of generating more revenue than you originally intended.
- Increased Chance of Business Growth: Once you’re able to prove to your potential customers that your product is unique, you’ll have a better chance of making more sales and growing your business around the world.
Global Crowdfunding Platforms to Consider
One of the major factors that determine the success of your crowdfunding campaign is the effectiveness of the platform you use. There are many global crowdfunding platforms available, but some work better for specific campaigns and products than others. Have a look at a few before you make a decision. To help you out, we’ve come up with a list of five of the best global platforms to consider:
- KickStarter: Launched in 2009, this platform is mostly used to generate funds for comics, journalism, technology, video games, music, stage shows, and films. So far, it has generated funds for over one million projects and has a presence in several major countries that harbor creative projects.
- GoFundMe: Rated as the largest social fundraising platform in the world with a community of over 50 million donors, this platform is mainly used for personal causes like medical bills and natural disasters. So far, it’s raised over US$5 billion.
- Indiegogo: This is another platform that’s great for crowdfunding international projects. The platform’s fundraising campaigns are rewards-based, so backers receive gifts instead of equity. Launched in 2008, this platform is now accessible in more than 235 countries around the world. Plus, Easyship is now the exclusive shipping provider for Indiegogo campaigns, so getting your orders out is a breeze with all our useful tools!
- Crowdfunder: Formerly known as RocketHub, this platform was launched in 2010 and since then, has been used to raise funds for creative projects and B2B technologies. It’s used in over 190 countries around the world, including in emerging nations.
- Patreon: Podcasters, webcomic developers, YouTube content creatives, musicians, and artists use this platform to fund their projects. Among the global crowdfunding platforms, this is a great supporter of creatives. Once campaigns are set up, users can choose to request funding for their project on a recurring basis, or by project.
10 Tips For Crowdfunding International Projects
For any business owner considering crowdfunding, the most important aim is to carry out a successful campaign and raise the funds they need. To further increase your chances of making a huge success of your international campaign, here are a few things you should take into consideration:
- Determine if it’s Right For You: Before you go ahead with a campaign, you should first figure out if you have the time and resources required to run the campaign. You should also decide if your new idea or venture is something people will really be willing to invest in.
- Choose the Appropriate Platform: To make the most of crowdfunding international projects for business expansion, you should ensure that you choose the right platform for your business, product or idea. Some focus on creative projects while other specialize in technology - choose wisely.
- Can You Stand the Expenses?: This is an especially pertinent question if you’re planning a rewards-based campaign where you will need to pack and ship gifts to your backers. Don’t forget that you will also have to pay a certain percentage of your raised funds - or a flat-fee - to the platform to run your campaign.
- Can You Spare the Time?: This isn’t just about money. You will have to spend a lot of time and energy to make sure your campaign is a success. For example, you’ll need to work on it constantly, and later, prepare the gifts that you’ll send to your backers. All of this takes time.
- Tell a Unique Story: You want to impress your potential customers and backers. Tell them a story that sets up a problem and shows how your product can solve it. This can be done through images, great text, or creative videos.
- Write a Detailed Business Plan: Some of your backers will be smart, business-savvy types and they’ll want to know how you intend to make your business a success. Make sure you have a detailed business plan handy so they can see that you’ve got real plans behind all your ambition.
- Don’t Limit Yourself: Don’t make the mistake of depending on the community for the success of your campaign. Use different social media platforms to create awareness around your campaign.
- Be Realistic: Campaigns can live or die by honesty. Nothing will be more helpful than being realistic and honest - with yourself and your backers. Set realistic targets and be honest about what the funds will be used for.
- Create a Formidable Team: Your aim is the raise funds and there’s no better way to do this than to liaise with reliable people that have the knowledge to help you achieve your goals.
- Make it Seem Urgent: This is one strategy that has always worked for campaigners, no matter what platform they use. Set a short timeframe for your campaign to create a sense of urgency and spur your backers into action. This will, in turn, help you reach your funding goals faster.
Reach More Customers with Crowdfunding Campaign
Compared to traditional methods of fundraising for startups or growing businesses, crowdfunding for business expansion offers a wealth of benefits that have made it a viable, popular option for raising money.
Having supported some of the most successful campaigns in recent years, Easyship has plenty of experience with crowdfunding. We’re here to help you make your campaign a success (especially if you’re using Indigogo, where we’re the exclusive shipping partner!) Sign up for an Easyship account now to find out more on how we can help you to successfully raise funds to grow your business.