If you think you know everything about crowdfunding, think again…
This week, UK2 attended a talk at Google’s tech hub, Campus, on the future of crowdfunding. We’ve interviewed countless Kickstarter success stories on our blog, so we thought we knew a thing or two about the practice. We were wrong. Here’s are five things we bet you never knew about crowdfunding, and five ways it could benefit your business…
1. Crowdfunding is a marketing technique
So you thought crowdfunding was just a way for companies to raise funds? You’d be mistaken. Unlike getting a loan from a bank, crowdfunding earns you ambassadors as well as cash, claimed Ricardo Sequerra @ric0seq from equity crowdfunding company Seedrs. These ambassadors then become part of your marketing department.
Even if you don’t reach your target for investment, crowdfunding will get your brand and name out there and start the ball rolling as far as your brand reach is concerned.
2. Crowdfunding isn’t just for start-ups
More and more mature companies are turning to crowd funding these days. They use it to work on new ventures or ideas and to carry our beta testing projects.
3. Crowdfunding can get you access to an international audience
Many crowdfunding sites are now international, so they can give your company or product exposure in countries you might not have thought you could reach. After five years of the crowdfunding phenomena, angels and investors from all over the world now keenly monitor crowdfunding sources for their next opportunity. Anastasia Emmanuel from IndieGoGo offered a great example of this at the Google Tech Hub talk. She explained how the company Tens Life had been spotted on IndieGoGo and a few weeks later they were flown out to New York, a market they hadn’t expected to tap, by a keen investor. They needed £9400 for their project and ended up with £336,000.
4. Crowdfunding can be used for market research
The feedback from crowdfunding can be so insightful that it can change a company’s entire marketing strategy. This was the experience of MisFit Shine. This company created an activity tracker for sports enthusiasts that would look discreet when used. After putting their idea on a crowdfunding site, the feedback they got told them their customers didn’t want a discreet device. Instead, they wanted a necklace or bracelet. As a result of this intelligence, MisFit Shine altered their strategy.
5. Crowdfunding is just the beginning
Even companies that don’t reach their initial goal on crowdfunding websites can still reap the benefits of having the courage to do it in the first place. This was the experience of Newcastle-based biotech company QuantuMDx, who put their handheld disease diagnostic tool Q-Poc on crowdfunding. They didn’t get the £50,000 they hoped for, but a few weeks later, thanks to crowdfunding-related exposure on Huffington Post and other media outlets, they were approached by private investors who gave them almost nine million pounds to develop their product.
Hundreds of crowdfunding websites now exist around the world. Bloom VC is one you might not have heard of before. It’s a great place to start with crowdfunding, because no project is too small for this site. Need £2,000 to make a film – try here. Want to fund a £500 trip for your charity? Again, try here.