If you want more cash in your business without having to give up equity or pay interest loans, Crowdfunding for small business could be a great option for you. I recently learned 5 surprising facts about crowdfunding for small business during my interview with Dr. Letitia Wright, a crowdfunding master.
We all know cash is king in business. But sometimes it’s not so easy to get. If you are a new business, you probably won’t be able to get a loan. And taking on investors before you’ve generated revenue is risky. You’ll lose control over your decision making before you’ve even really gotten started.
So what’s a small business owner with cash flow issues to do? Consider crowdfunding.
Here’s 5 things I didn’t know about crowdfunding that I learned from Dr. Leticia Wright:
- It takes money to crowdfund. It is essentially a marketing campaign and you’ll need to have a production budget for video, websites, driving traffic etc. It’s not free money so you’ll need to plan a budget, but you can have great returns with a successful round of crowdfunding.
- Crowdfunding goes way beyond kickstarter and gofund me. There are actually 2500+ different types of platforms you can use to help you with your crowdfunding. Dr. Wright talks about several of them in our interview.
- There are actually 5 different types of crowdfunding strategies you can use. They are equity, subscription, presales, government, and charity.
- Using the wrong type of strategy could kill your project even if you have a great product.
- As a consumer, you’ve got to be careful, because the crowdfunding platforms actually don’t patrol the projects. The responsibility is on you to do your homework and make sure you’ve investing in great products and companies. Dr. Wright describes it as the “Wild Wild West.”
To learn more, watch my recent interview with Dr. Leticia Wright as we talk all about crowdfunding for small business.
