Crowdfunding is the practice of funding a venture or a project by raising little amounts of money from many people, usually through the internet. While there exist a lot of information and facts about crowdfunding, there are several myths and misconceptions that surround it. Today, we outline some of the common myths about crowdfunding that you need to know. Let’s get started!
The Seven Crowd Funding Myths
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Here are the most common misconceptions about crowd funding:
- Crowd funding is risky
- It is the last resort option
- Crowd is always on standby
- It is Very Easy to go Viral
- Your idea will be plagiarized
- Crowdfunding is a scam
- People don’t raise funds prior to the campaigns
Crowdfunding is Too Risky
Some entrepreneurs and contributors hesitate to adopt crowdfunding for fear of being conned. Fake campaigns may have been witnessed in the past, but reputable crowdfunding platforms go to great lengths to ensure the campaigns they are hosting are legit. Moreover, setting up a crowdfunding drive involves a lot of work, including network marketing and follow-ups.
Crowdfunding is the Last Alternative Option
While most entrepreneurs regard crowd funding as the last option for fundraising, it has since evolved from “alternative finance” and transformed to mainstream capital-raising. Moreover, reward-based crowdfunding drives are akin to normal business operations, as opposed to charity fundraising.
People are Waiting for Your Campaign
This myth accounts for about 60% of the failed crowdfunding campaigns. The media focuses on success stories with regards to crowdfunding and pays little attention to the efforts necessary to produce successful campaigns. This leads to people assuming that there is always a crowd on standby to contribute to their dreams.
Crowd funding may have the potential to expose your business to a massive audience, but you will have to build a community and convince the audience why it should support your venture.
It is Very Easy to Go Viral
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There may be a few campaigns that have broken the internet; this should not fool you. You should not believe that every crowd funding campaign can go viral so easily without much effort, just because people cannot stop talking about the few outrageous ones.
It takes effort in terms of top-notch marketing skills and PR to sprout into a giant of ingenuity and break the internet.
It Is a Bad Idea for Your Brand to Seek Funds Online
There are different kinds of online funding platforms. There are non-curated platforms, open to anyone to create a profile and seek funds. On the other hand, there are rigorously curated platforms, accepting less than 5% of applications they receive. Such platforms can connect your project with experienced, well-established investors, who can give your concept a stamp of approval.
Crowdfunding Makes it Easy for Someone to Copy your Concept
As a brilliant entrepreneur, the fast thing to do, even before thinking of crowdfunding, is to patent your intellectual property. This ensures that any attempt of plagiarism is dealt with before it takes root.
People Don’t Raise Money before the Campaign
This concept is a farce. Most people raise a huge chunk of their expected target even before the crowd funding drive kicks off. This gives you a better chance to go viral.
For those looking into using crowdfunding raise capital, you should look beyond these myths. With that, you will benefit from the innovative way of harnessing the power of the crowd to grow your business. There are several crowdfunding platforms available today, but with the Plumfund, you can accomplish more.