We all know that humans are unique in many ways. We differ from each other and our framework of reference influences our perceptions and decisions at the end of the day.
What we know and what we do not know impacts on our contributions when certain topics are being discussed. We form our opinions and base decisions upon them. Sometimes our beliefs or opinions are tested when we make our choices.
It is sad when we make choices that are not beneficial to promote growth in our businesses. Many times the door to expanding our businesses are open but we prefer to close that door while missing out on the opportunity.
Sometimes we tell ourselves it’s not going to work before we have even given it a try. If we are prepared to learn from our mistakes and if we are prepared to go that extra mile we might amaze ourselves.
Some things are not for our privilege but for those who want to persist in order to succeed. Many start-ups are struggling and sceptical about what can work for their businesses. We tend to think or we are of opinion something won’t work for our businesses based on what we think the majority believes in.
When we are looking for funds we normally think we need a financial institution like a bank and when somebody raises the word crowdfunding, we want to raise our eyebrows and we judge this practice harshly.
When the door is open, let us explore the opportunity and with a bit of effort, we may succeed in becoming knowledgeable. Let our knowledge guide us to make informed decisions.
Let us look at the four main types of crowdfunding.
1. Donation Based Crowdfunding.
It means exactly what it’s saying - no reward is involved. Your contributors are contributing primarily because they believe in the cause to raise the funds. It may be money or other resources to support the idea or cause.
2. Rewards-Based Crowdfunding.
Okay, this is where your contributors expect some form of reward for their contribution. I am not going to go into the history of crowdfunding but it has been along for quite some time, and common practice is that you have at least three levels of rewards based on the level of contribution.
3. Debt Based Crowdfunding.
It means you or your company’s intention to repay your contributors who agreed to lend you the money, is expecting something more binding. It’s more of a contractual agreement with timeframes and set interest rates to repay your contributors.
4. Equity Based Crowdfunding.
Your contributors expect a piece of your business or company. Returns on investment in terms of shares or membership interest plays a big role.
I do not wish to get into textbook definitions about crowdfunding but to stimulate you to read and search for more information if you are interested in the topic. Start-ups in general and even startups on the blockchain may benefit by crowdfunding.
There is a potential for crowdfunding to support your marketing efforts and you need a strategy to implement it successfully.