Crowdfunding? Know The Good and Bad
-Receiving free money to help fund your venture is always nice.
-Independence from investors in which have a controlling hand in businesses abroad.
-Creating a buzz for yourself through your products or ideas.
-Getting people emotionally involved in what you do. Creating that comradely and making fans feel like they are a part of the team.
-Being able to generate followers for your product even before it’s off of the product line.
-Expanding your empire through social media and other avenues.
-Making new friends and business contacts.
-The exciting learning experience you gain from Crowdfunding, whether boom or bust.
-Failing to reach your goal. This can be a setback for even the most motivated people. The positive thing about failure in Crowdfunding is that it did not cost you much overhead to begin with. Backers are not charged by websites for membership fees, and they don’t have to pay percentages to anyone either. However, if you have accumulated a lot of debt for some reason, you may still be responsible for paying back the money.
-Getting your ego bruised. If you do fail to reach your Crowdfunding goals because of constant rejection, it can sting. Your public image can take a hit too, so be careful in making promises you cannot keep.
-The chance of crossing paths with backers whom have personally failed at the same type of venture you are leading, or knowing someone who has. No one likes to be fooled twice.
-It may become overwhelming. The lack of time or money, and constantly pleasing your backers may become too stressful. Maybe you didn’t think Crowdfunding would be just as consuming as a 9-5 job.
-Making sure to not make your fans lose interest because of over-marketing, spamming, or too much pressure. Some backers like to take their time to see if you’re going to be around for a while. Who wants to donate money to a fly-by-night scheme?
-Running out of money. There is nothing worse than having everything in place, only to be short-changed by economic karma. Again, make realistic goals and budget as much as you can for rainy days.
-Possible legal issues just in case you receive all of the funding you want, but still cannot provide a good or service on schedule. Other than legal implications, in which have not been defined by the government yet, the other downside of this is that you don’t want the agonizing feeling of disappointing (potentially) thousands of people. That’s a huge weight for anyone’s shoulders to bear. Further ramifications can include other fans or businesses (additional backers) becoming irate. Sometimes no excuse is accepted, no matter how legitimate it seems.
-Being shy, and getting over that hump. The slopes of confidence can be difficult to master; even for the best of us. The feeling of rejection is hard to push aside when you see so many other campaigns taking off they way they do. To reiterate, do not take anything personal. Just revamp your ideas and move on.
-Dealing with backers or everyday individuals who do not like being pushed for money. It’s a very thin line between asking and begging. Be sure to straddle it safely, and take rejection in stride. After all, Crowdfunding is about providing multiple avenues for your venture. If one avenue is jam-packed with traffic, find another route or take a detour.