Sponsored Post
Crowdfunding is rapidly becoming one of the most popular ways to raise money for causes, start-ups and much more. Starting in the wake of the 2008 financial crash, this form of funding allows individuals to easily and quickly contribute to a larger goal. It can be an incredibly successful way of raising money when done right and a lucrative business model for crowdfunding platforms.
Here are some of the steps you should take when considering whether to start your own crowdfunding business.
Find The Best Software
A great first step when setting up your crowdfunding business is to ensure that you have the right software. There is a growing market for crowdfunding software, so you may need to do some research to find the right technology to suit your business goals.
You could consider creating bespoke software for your business, though it is often preferable to use tried and tested software when first starting out in the industry.
Consider A Niche In The Market
There are many crowdfunding platforms out there, so you will need a unique selling point to help draw business to you. It may help to conduct some market research to see if there are any areas of the crowdfunding market that are currently being under-served. Selecting a niche can help you establish your business and ensure that you have a pool of customers that you can appeal to straight away.
Ensure You Understand The Legal Side
The regulation of crowdfunding is still in its infancy, so it is vital to stay updated with developments in this area.
It may be beneficial for you to hire an appointed representative who can help you comply fully with the Financial Conduct Authority (FCA) rules and regulations. If you want to know more about how an appointed representative can benefit your crowdfunding business, check out this article from Northern Provident.
Decide On A Crowdfunding Model
There are many different crowdfunding models to choose from, and it is a good idea to do some research into each of them and decide which will work best for your business. Donation-based is the most well-known form of crowdfunding and is the simplest to implement. You might consider starting with donation-based crowdfunding before moving on to more complex forms of funding like equity- or reward-based.
It would help if you also considered how you will monetise your platform. This could be in the form of a membership fee or a percentage of each fund’s takings.
Research Advertising Options
When starting your business, it is a good idea to have a number of revenue streams. While the goal will be to make money from the different crowdfunds, you might also consider making revenue from things like advertising. Money earned from advertising can help you ensure financial security while getting your platform established and giving you the peace of mind of having multiple income sources.
It may help to research the different forms of advertising that could benefit your business and select the one that will suit your business model best.
