2:06 AM
sf platform
In
her book Cash From the Crowd, Sally Outlaw, founder and CEO of crowdfunding
website peerbackers, reveals the secrets of funding your business with help
from colleagues, peers, family, friends and even perfect strangers through a
crowdfunding campaign. In this edited excerpt, the author shares her answers to
the questions she hears most often about raising funds through a crowdfunding
campaign.
As
the founder of a crowdfunding website, I get a lot of general inquiries from
users. Here are the top five questions which apply broadly to most campaigns.
1.
Can I run a campaign simultaneously on more than one crowdfunding platform?
While
most websites don't prohibit you from posting to more than one funding platform
at a time, posting on multiple sites can hurt your campaign. The biggest
problem is lost momentum, because backers like to see you approaching your
financial goal. If a project is posted to more than one website, campaign
momentum is diluted as contributors are split among multiple platforms. And, of
course, if you're on an "all or nothing" crowdfunding website, you
have a bigger chance of not reaching your goal and therefore losing all the
funding you do attract.
It
can also be confusing for backers and press if you're on more than one
platform. To which website are you sending them to learn about and support your
project? Better to rally all the social media and hard-earned press exposure
around one fundraising initiative. Also, you probably understand the amount of
work that will go into promoting, maintaining and updating your campaign while
you're fundraising. Refreshing your content, providing updates, adding new
videos and perhaps even new rewards all contribute to a successful raise. Given
this, how many websites would you really like to manage on a daily basis?
It's
better to invest your time preparing, planning for and promoting one robust
campaign. Running more than one campaign simply reduces your effectiveness
without expanding your reach.
2.
Do I have to be a legal entity to post and raise funds?
The
answer to this is yes and no. If you are crowdfunding using either donation or
reward models, then you don't technically have to be incorporated as a legal
entity. These can be good avenues for testing out an idea. However, you would
need to be a legal organization to participate in equity and lending
crowdfunding. The exception: You could seek a loan on a lending site such as
Prosper.com or Lending Club as an individual and then perhaps use the proceeds
for a business purpose.
Read more: http://www.entrepreneur.com/article/228460
