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Crowdfunding Research Paper

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Things no one will tell you about crowdfunding your product:

Crowdfunding has emerged as an innovative way for entrepreneurs and businesses to raise money. Within a few minutes, almost anyone with an Internet connection can raise potentially millions to launch their product or service.

No need to ask a bank, find a rich family member, or angel investor.

Who wouldn’t want to be a part of that?

Crowdfunding, however, isn’t the shiny “launch a product and easily get money from people around the world” tool that it appears to be.

● A little over ⅓ of crowdfunding projects fail to get funded (Entrepreneur)
● Only about 44% of Kickstarter projects are fully funded (CrowdCrux)
● Contrary to what you would expect, it isn’t all about the money. …show more content…

While catering to your backers is important, it’s very important to remember that backers are investing money into your mission, not just the product. The best gift crowdfunders can give their backers is a well-run campaign that leverages investments into something awesome. This includes delivering the projects on time, but it also includes fulfilling your end of the investment bargain.

4. Kickstarter may not be the best choice for you (even though it’s a verb)

While Kickstarter has the largest audience and a globally recognized name, it may not be the crowdfunding platform for you. Each crowdfunding platform has its own pros and cons. Each platform has its own niche of products that work well (and don't) on their site. When planning your campaign, investigate different crowdfunding platforms, rather than take an "all or nothing" approach. Instead of defaulting to Kickstarter, IndieGoGo may very well be a better option for your product.

5. Crowdfunding requires a lot of work than you think

Articles on successful crowdfunding campaigns treat …show more content…

They forget about margins. When rewards are given, the retailers who sell these rewards want to be paid too. Include margins for retailers while planning your crowdfunding campaign.

2. They get lazy. Because setting up a crowdfunding account is so easy, many crowdfunders forget to invest in continuing to develop and promote their product idea.

3. They obsess over small details like shipping to backers. Shipping is extremely important, but it should not come at the cost of your profits.

4. They don’t build their brand. At the end of the day, a brand is the only way a good successful campaign will stand. Your product will not be able to stand on unique technology, pricing, or any other feature. Your brand is what will carry your sales.

5. They remain a one-trick pony. Retailers don’t like single product companies. Instead, they prefer a business with a suite of products to start taking up retail space. Having a variety of products increases marketing opportunities and ensures a growing customer base.

6. They aren’t building a unique product. In order to get funding, you need to offer a product and experience that is unique. Without that, your marketing is destined to be

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