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Dos and Don’ts of Crowdfunding

Posted on May 19, 2017

Crowdfunding is an interesting and lucrative avenue through which business startups can raise money. There are also numerous personal fundraising websites that are a big plus in efforts of raising money for various types of startups. Personal fundraising websites provide important content and information about the fundraising efforts and the causes for which the money is being raised.

Personal fundraising websites provide channels through which people can have insight into the idea being developed or marketed and pose relevant queries, inputs and comments as well as make their monetary contributions. These personal fundraising websites serve as the image of those seeking to fundraise and can attract investors and well wishers dependant on how professional the sites are and the business idea being sold.

Startups’ crowdfunding efforts can use personal fundraising websites to up chances of successfully obtaining funding. However, there are specific dos and don’ts that contribute success/failure of crowdfunding fundraising efforts that startups need to know.

1. Dos of how to raise money for a startup through Crowdfunding

  • Have clear goals and objectives

    The initial steps in building an idea on how to raise money for startups include developing clear goals and objectives. These form the guiding tool in determining how much money is needed, how the funds will be used and what the returns of the investments will be.

  • Target institutions and individuals alike

    Keenly assess your sector of operation and create unique and different approach methods for individuals and corporate or institution dependant. By involving all these groups, you will stand a higher chance of getting the required funds. Also dependent on whether you are looking for dormant or active investors, broadening your choices may be well informed.

  • Have a unique story

    Read widely and stay informed on information and issues related to how to raise money for startups and about your industry. Then use such information to develop and tell your unique story to the public with a view of attracting investors and support. A unique, believable and true story can be an attractive feature to potential investors.

  • Keep active correspondence with your supporters and investors

    You must keep updating your investors, donors and supporters on the progress you are making. By doing so, they will be more comfortable to let you run the venture and even give you more funds or professional inputs and contacts that can be very useful to your startup. You can also keep updating the information in your personal fundraising websites to attract more funds and or keep interested parties updated.

  • Social

    Be a social person. Interact with people either through social platform, in person or in any other appropriate manner. Tell your story in person and let people learn from you. Ask for help whenever necessary and do not be selfish with information.

2. Don’ts of how to raise money for startup

  • Forget to appreciate your teams

    Do not appreciate and thank your team, supporters and investors at your own peril. Appreciating other peoples help and efforts is paramount in building a successful venture.

  • Do not obey regulations and law

    Your business need to run within the confines of existing laws and regulations. Flouting the laws and regulation would land you in trouble and have profound adverse effect on your business. Have your business registered and keep your licenses up to date at all times.

  • Doing things in haste

    Just because you have a personal fundraising website and a couple of interested investors doesn’t mean you will succeed. You must have passion in what you do, have clear plan with goals and objectives and understand that business takes time to grow and establish.

  • Low expectations

    Important advice on how to raise money for startups state that you must not set the bar too low. As much as your fundraising targets must be realistic they must not be set too low and must have some attractive margin to cater for any eventuality. Your expectations and the charisma with which you will sell your idea will determine your success and eventually the support and confidence potential investors will have in you.

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