Crowdfunding – Asking a bunch of strangers to fund your business idea…Sounds absolutely crazy right?
Crowdfunding is huge in America with the likes of Kickstarter being the largest platform to raise funds. The phenomenon is really taking off here in the U.K allowing entrepreneurs to access alternative options for funds during the recession.
We launched a crowdfund via Bloomvc.com in August last year and succesfully raised £1300 for packaging development to send our cakes nationwide. We are so excited to launch nationwide delivery next month and it’s all down to the help of 14 customers and complete strangers.
Some crowdfund platforms are equity based but Bloomvc.com works by rewarding backers in return for money. If you don’t raise the full amount that you need then you don’t get a penny.
I offered lots of yummy cake and listed each person as a founder on my website cake-cetera.co.uk After perfecting the packaging I am now able to send goodies to my backers and plan to use them as guinea pigs for new products and feedback so they feel part of my journey and success.
Crowdfunding will only work for you if you put the work in. I’ve listed a few wee tips that might help if your thinking about it!
1. Build up your contacts/supporters/followers/customers first.
2. Don’t expect to upload your fund and wait on backers. You will have to spend time every day generating interest on social media. Prepare to lose followers.
3. Expect negativity. You are asking people for money to fund your idea.
4. Reward your crowdfunders with rewards that reflect your company
5. Update your funders regularly and make them feel part of your success.
6. Don’t give up. I received £600 on the very last day from a complete stranger who has also been great in providing advice and support.
You can read more about my crowdfund below: