Today, I want to share about crowdfunding platforms. What is crowdfunding? When small business or entrepreneur has an idea but no capital, crowdfunding platform allow them to persuade individuals to each give a small donation or even more. It is an efficient and effective way to raise capital for business or project. It has become possible in theses days, and there are more than 600 crowdfunding platforms around the world currently. How does it work? Post your idea, share your idea, back a project, and project funded. It all sounds easy but it requires effort of online marketing strategy and execution eventually. The platform allows creators to post their ideas, but without the right strategy to the potential target, it is just a waste of time. Before we talk about the strategy online, let’s review SWOT of crowdfunding platform.
- Entrepreneurs may get accessibility of venture capital.
- Entrepreneurs can test their ideas for marketability.
- Entrepreneurs may benefit for communities via both local and global
- Administrative and accounting challenges
- Currently, all platforms are internet based
- Lack of advises
- Expose business ideas and models to the public
- Potential Fraud (Equity based crowdfunding)
- Social network for promotion and possibilities go with crowdsourcing
- Positive effects on economy
- A niche investment opportunities to raise money
- Current legal restrictions are not suitable for equity crowdfunding
- Risky nature of startups and small businesses
Personally I think, no matter what idea any entrepreneurs have, there will be always challenges and threats. Among all I shared in SWOT, social network aspect of crowdfunding will help the entrepreneurs the most. Because that is the power of crowdfunding. Raise capital and test their idea to the market. Next time, let’s talk about how to benefit the power of social network promotional possibilities on crowdfunding. GOD Bless.