Raising Capital - CrowdFunding in 2016 Foundation by Sean E. Nota

The major question that most aspiring entrepreneurs and social contributors have is: How do I raise capital to finance the business idea, charity or community projects ?  This article reveals the methods accessible to all with noble intentions to be of greater impact in this session. The main focus will be crowdfunding sites and how to effectively benefit from services.

Crowdfunding  is the practice of funding ideas and causes through collective contributions by large number of people. The internet has transformed crowdfunding and brought incredible growth to this alternative source of funding. The impact of social media has resulted in friends,  family and well wishers to be able to contribute money from all over the world.

Gofundme (which had traffic of 470 million in 2004) and Kickstarter (which had 444 million in the same year) plus other similar companies create platforms that work as meeting point between the person seeking funding and the people willing to invest.  These companies enjoy the large volumes of traffic and also collect a commission of averagely 5% the total amount raised in exchange of exposure and helping transfers of money.

The benefits are largely for the visionary and the community. The visionary has the opportunity of having his or her ideas exposed to the world and can appeal to the niche concerned about the values and beliefs that the visionary upholds. These companies have access to mainstream media and have the brand equity that people are willing to commit to financially.

 The community gets to be involved in ideas that transform the community, shaping and re shaping the identities of that community. They also benefit from getting exclusive products and having shares in brilliant start ups.

They are 4 main types of Crowfunding, these are: Receiving , Equity, Donation  and Lending Based.

The Receiving based is when people invest in the company and get the product as a thank you. For example if you are selling designer T shirts you will send the investors a T shirt as a thank you note.

Equity based Crowdfunding started only in 2012 because of the JOB Act in the USA. This type of crowdfunding involves  financing in return for shares. This differs with country’s company act. So research the number of investors allowed in your country for the type of registration that you have is required. For example most  African limited companies have up to 50 shareholders. This is similar to IPOs method of fund raising, take Disney for example it has a million shareholders. What these platforms  have done is to allowed smaller companies to access to public funds.

Donation based- This is donation for a cause that people identify with,or products and services  that have manage to amaze people can be very successful in through this platform.

Lending Based- The investor will be returned the money after a certain period. Some incentive is also given to the investor in the form of social currency or interest on the amount borrowed.

How do i get people to support my cause?

Be Original- The success stories reveal that people support ideas and causes that are original . If you have an invention that will make people’s lives easier, solve a common threat or just wow them, than it is likely to be supported. If your are offering help to a group of people or animals usually neglected like elderly or Lions in same remote part of Africa in an original way this will get people funding you. What is critical to understand is that even if your request is common like lacking school fees, it can be put across in an original way.

Stories-  If your story is compelling and can resonate with the people it will be supported. Honesty and evidence of this honesty will get you bonus points. As people we relate to ideas more than abstract facts. If you can mold your ideas to be more understandable to the target audience your likely to get support.

Have someone tell your story- the psychologist have proven that a person representing himself in court increases your chances of being convicted even if your innocent. The fact that someone can collaborate your story makes it more valid. This is not a law you can successfully convey your idea without someone speaking for you, it is however beneficial to have someone or a group of people supporting  you. These will leave positive comments or share on social platforms and this goes a long way in generating the traffic to your post.

Tip: Have someone posting the campaign on your behalf.

Communication- Ensure that your methods of communication are clear for example ,ensure that if it is a video it has clear image and audible sound. If it is picture it should be relevant to the message and has good resolution. Correct spelling and grammar for all written text.  In cases where you can not provide the above give reasons why, that will not make people  overlook it but shows your aware of the chain of communication.

Platforms- Because of cyber crime it would be wise to use platforms that people are already familiar with. Also identify platforms that attract the target audience that will be interested in your story. Tip: identify the crowdfunding service that is most appropriate for the business model or the organisation goals you represent.

In the year 2013 over 5.1 Billion by 2015 over 34 Billion was raised all over the World. If your idea or cause can help effectively communicated to the global community and follows appropriate procedure you will certainly be funded.

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Contributor : Sean Emmanuel Nota is an author of the Book Opulance: Developing Character that creates and sustains wealth. 

After interviewing over 500 successful in business, entertainment, sporting and politics he identified the 5 steps towards Opulence and the character that is needed to step up into each stage. To get accurate interpretations and face to face interviews he traveled to Asia, Europe and Africa compelling data and analysing it. The book is to be released in end February 2016. Reviewers and collectors edition will be available end  January 2016. 

Besides writing he does talks on matters relating with personal development and marketing . Sean is a student of Political Science and International Relations.


“In the next article will offer examples of success stories and steps to launching your first campaign.” Sean.E.Nota

Resources:

Crowdfunding Success Stories: http://www.entrepreneur.com/article/232234
Best Crowdfunding websites:  http://www.forbes.com/sites/chancebarnett/2013/05/08/top-10-crowdfunding-sites-for-fundraising/
Basic Information Crowdfunding:  en.wikipedia.org/wiki/Crowdfunding

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