In our newsletter last week, we continued our series on Crowdfunding and highlighted the importance of regulating Crowdfunding as a source of capital for Start-ups and the possible consequences if the space is left unregulated.
Crowdfunding has a lot of benefits to the entrepreneurs who use it, whether looking to raise funds for achieving business goals, expansion or gather helpful feedback from potential customers and backers. In this week’s edition, we shall discuss the accruable benefits to MSMEs who seek to raise capital via Crowdfunding.
- SOURCING FOR CAPITAL TO BRING IDEAS TO FRUITION
Every idea requires resources to become a reality. Before crowdfunding, entrepreneurs faced a long and difficult road to secure funding. Their options included applying for bank loans, searching for government grants, pitching venture capitalists and angel investors, borrowing money from family members and friends or tapping into their savings. Crowdfunding, however, provides a method to obtain the funds needed to launch an idea quickly and with the support of an engaged community.
- GAINING INSIGHTS FROM EXPERTS
The traditional path from concept to market is time consuming and expensive. Crowdfunding is often a more efficient way to gather feedback and find valuable marketing insights. In many cases, insights from prospective Investors helps entrepreneurs to refine their ideas, think through their strategies and proffer solutions that make a bigger impact.
- CUSTOMER RETENTION
A good crowdfunding campaign can help enhance an entrepreneur’s business visibility, validation, and trust. When interested investors fund your campaign, it enhances interest and trust in your project. This demonstrates that potential customers believe in your idea or vision and have a real financial interest in sharing and empowering your success. Ultimately, this helps entrepreneurs learn the importance of customer retention.
- ACCESSIBILITY, AFFORDABILTY AND EFFICIENCY
Crowdfunding is streamlined by using regulated platform that supports crowdfunding. Crowdfunding platforms usually do not charge a setup fee and will only take a small percentage of funds raised. Leveraging a crowdfunding platform to reach a broad audience allows entrepreneurs focus on building the business rather than trying to figure out how to find big investors, get an introduction and present your pitch.
- RETAINING CONTROL OF YOUR BUSINESS
Crowdfunding affords the entrepreneur the opportunity to structure its business in such a way that they maintain 70% ownership/control of their business.
NASD is positioned as the right platform for your project, you can tell the story of your business and enjoy the benefit of having potential funders find you. It’s more efficient than traditional fundraising.