Sunday, July 22, 2012
Raising Money through Crowd funding
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For as long as there has been money in
South Africa, people have been trying to get their hands on it for one reason
or another. For some it is just a matter
of personal gain, for others it is to keep a roof over their families heads and
food on the table. But for some, it has
been to create a business plan and start a business or create a work of art, or other goal geared towards
contributing to society as a whole.
There are hundreds of ways to raise money
and most of us have been involved in some form of it or another all of our
lives. Starting with the child on the
corner selling lemonade to passerby's, to community bake sales, car washing
services, street performing and the like.
All of these activities involve raising money. The problem with them is that they normally
only raise a small amount of money at a time and require a great deal of effort
on the part of the people working them.
Crowd funding is a new way of raising money
in South Africa. Think of crowd funding
as a community bake sale, except it's happening simultaneously all over the
world. All of those little sums of money
the bake sale generates add up to a large amount that can be used to fund any
type of business or project. The vehicle
used to carry on this worldwide bake sale is the internet.
Raising money through the internet is
nothing new either. However it has in
the past been the unfortunate victim of scam artists trying to fool people into
sending them money. Because of this
raising money through the internet was given a bad rap. Now though through the use of professional
crowdfunding sites it is possible to legitimately raise large sums of money
over the internet. These professional sites
make raising money easier because they have reputations and standards to meet
to comply with government regulations so people are more willing to trust them.
Raising money through crowd funding is used
mostly by business start-up entrepeneurs as well as artists, musicians and film
makers. These are people who do not
qualify for financing either through angel investors or venture capitalists but
still have a great idea or project that they would like to bring to the
public. So instead of going out and
washing cars or having a bake sale, they make a video explaining their project,
the benefits of it to society, why they can be trusted, and what their long
term goals are. This video is then
placed on these crowd funding websites where people can watch them, get more
information, and if they decide to they can invest in that project. These small investments from hundreds of
people add up to enough money to get the project off the ground.
Another means of raising money is using
your own network of people you know.
Start off with your friends and family.
Tell them about your project and that you are raising money to make it a
reality. This is the most common form of
crowd funding and has been around forever.
Then take your message to the people through social media and press
releases. Tell them about why your are
raising money and also why you have chosen crowd funding as your vehicle to
come up with the capital you need. Let
them know what the benefits to them will be for investing in you and build
their trust.
Raising money through crowdfunding can
happen very quickly if your message is a strong one that motivates people. Or it can take some time to build up
momentum. The most important aspect of
raising money through crowd funding is you continue to spread your word on a
daily basis and be open and honest with the people you hope will invest in you.
This post was written by: Franklin Manuel
Franklin Manuel is a professional blogger, web designer and front end web developer. Follow him on Twitter
