Crowdfunding and the Numerous Benefits to a Business

Pavanan Ghosh

It is not easy for entrepreneurs to raise capital for their businesses. It is one of the most difficult jobs these days. There is no denying the fact that the present environment of business funding requires a lot of disruption. One important disruption that each and every entrepreneur needs to know about is the industry, which is starting to rise slowly. This is the industry of crowdfunding. This is known to involve a particular platform, an entity, or any individual, who requires funding and a huge community of reputed people, who are interested in contributing the funds. The only thing that they ask for in return is recognition and rewards.

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According to, there are more than 310 crowdfunding websites only in the United States.

If you do not have knowledge about the benefits which are associated with crowdfunding, it is crucial that you gain as much knowledge as possible. Given below is a list of the benefits that crowdfunding is known to offer to an entrepreneur.

Crowdfunding & The Numerous Benefits

#1. It helps in providing access to capital

During the early stages, it is obvious that the entrepreneurs are going to think that apart from their own network, they will be able to raise money only from the venture capitalists, accredited investors, and the traditional financial institutions, like banks. However, they need to understand that this is not at all true. Crowdfunding is undoubtedly one of the greatest alternatives for funding a business venture and this is normally done without accumulating business debt or giving up on their equity. The crowdfunding platforms, which are rewards based, are responsible for helping them to raise the money from their community, and take back tangible products or gifts in return.

#2. It hedges risk

There is no denying the fact that starting your own company is not only risky but it is also extremely challenging. Apart from failing to find sufficient funding, there are numerous expenses, which cannot be determined from the beginning, several challenges in the competitive market, and more. Moreover, you will come across people who will be interested in getting a piece of the business venture if you ask them to help you to take it off successfully.

If you decide to launch your crowdfunding campaign, you can be assured that these risks can be avoided. It is also going to serve as one of the most valuable learning experiences.

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Currently, crowdfunding allows the businesses to get market validations and also prevent them from giving up on equity, before introducing the concept of a product to the market.

#3. It is known to serve as a marketing tool

Active crowdfunding campaigns are the best ways of introducing the vision and mission of a business venture into the market. It is not only free but also extremely easy to reach a number of channels. Most of the crowdfunding platforms are responsible for incorporating the mechanism of social media, thereby making it smooth to obtain referral traffic directly to the website as well as the various other social media networks.

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This is responsible for allowing the business ventures to get numerous organic visits, from the potential funders as well as unique users. All these users are extremely important for the method of viral marketing, and this is because they share the capability of spreading the word about the business to all their connections.

#4. It helps in providing the proof associated with the concept

Showing the investors and also convincing yourself that the business venture has already received enough market validation is one of the most difficult tasks, especially when you have just started. However, with crowdfunding, even this is possible. The primary question that the institutional or angel investors are going to ask the owner of a business venture is going to be about the proof of concept. The appropriate manner of gaining respect as well as credibility is by showing them that the business venture has a crowdfunding campaign, which is successful.

This is going to show the integrity and trust towards a particular business venture and it will also help in verification that your business is on the appropriate track.

#5. It permits brainstorming

A huge challenge for all the small business owners as well as the entrepreneurs is covering the holes, which their business venture may have when they have just started. If they have the crowdfunding campaign, they will have the capability of engaging with the huge crowd and receive ideas, feedbacks, and comments. The feedback is considered to be valuable because it can be helpful to understand various aspects of the business, which they were not thinking of previously. Moreover, it also has the potential of inspiring other creative ideas, which can take the business venture to a whole new level. To get more information on crowdfunding, you can visit

#6. It helps in introducing loyal customers

Crowdfunding campaigns not only help the entrepreneurs to make sure that they are presenting their products and businesses, but the campaigns also provide them with the ability to share messages as well as the purpose, which lies behind them. People, who are constantly viewing the campaign and are deciding to contribute, are actually those people, who believe that the company is going to be successful in the future.

These people are basically the early adopters. An early adopter is extremely important for a business, as they are responsible for spreading the word about the business without hoping for anything from the business in return. These kinds of people are responsible for caring about the message and the brand of the venture, and they will also be loyal customers.

#7. It is easy in comparison to the traditional applications

Applying for the traditional methods of funding is definitely one of the most painful processes that each and every entrepreneur goes through. Thankfully, the process of applying for crowdfunding is as smooth as butter. The entrepreneur has to contact the platform that he has selected, and share the message of the venture, make an attractive video, and establish certain rewards. And it is done!


In essence, a crowdfunding campaign is one of the best ways for the entrepreneurs to get financing as well as the exposure that is required for the business venture to grow. Ensure that you take into consideration all the crowdfunding and the numerous benefits that have been mentioned above before you opt for a crowdfunding campaign.

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