Last week, WOMADE, in collaboration with SetGo, organized an enlightening session on crowdfunding. The primary objective of this workshop was to demystify the crowdfunding process and equip female entrepreneurs with valuable insights and tools necessary to turn their innovative ideas into reality. Crowdfunding extends beyond fundraising; it's a means to empower your supporters and bring them along on your entrepreneurial journey.
This article delves into the various aspects of crowdfunding and how to approach it for success.
Understanding Crowdfunding Models 📊
Before delving deeper into the world of crowdfunding, it's essential to comprehend the diversity of this financing approach, which offers four primary models:
1. Reward-based crowdfunding :
This model involves providing physical or digital rewards to backers in exchange for their support. Whether your project requires 10,000 or 50,000 euros or more, platforms like Kickstarter, Indiegogo, Kiss Kiss Bank Bank, and Ulule are instrumental in launching such projects.
2. Debt crowdfunding :
For this method, businesses must be incorporated. Debt crowdfunding, often ranging from 200,000 to 25 million euros, suits entrepreneurs who have already validated their concepts and need to demonstrate traction. Notable platforms for this model include LITA and Look&Fin.
3. Equity crowdfunding :
In this mode, your business should be incorporated, and you're expected to exhibit traction, market validation, a well-structured business plan, and more. Crowdfunding often involves collaboration with notable angel investors, and it allows you to raise between 1% and 20% of equity. Main platforms in Europe include Crowdcube, Seedrs, and WeFunder.
4. Donation-based crowdfunding :
This model is well-suited for personal or humanitarian projects, where contributors pledge to your project without expecting anything in return. GoFundMe is the most famous platform for this type of crowdfunding.
If you're looking to target the Belgian market specifically, you can explore crowdfunding platforms through this directory: [Crowdfunding Platforms in Belgium](https://thecrowdspace.com/directory/crowdfunding-platforms-in-belgium/).
Crowdfunding's Multifaceted Benefits:**
Crowdfunding can serve multiple purposes, allowing you to achieve various goals simultaneously, such as raising funds, testing product-market fit, building a community, proving your concept, maintaining control, creating a buzz, and pre-selling your product.
Insights from the Workshop 👩💻
During our recent "Crowdfunding 101" workshop, I had the privilege of interacting with fellow female entrepreneurs who raised several pertinent questions and concerns. Here are some of their key concerns:
Fears of Not Reaching the Fundraising Target
Many entrepreneurs worry about not reaching their fundraising goals and facing the potential consequences of the "all or nothing" rules prevalent on most crowdfunding platforms. It's essential to recognize that crowdfunding isn't a game of chance; meticulous planning can ensure success.
Discomfort in Asking for Funding
Crowdfunding is not merely about seeking financial support; it's a journey that allows your community to be part of a project close to their hearts. It's important to remember that you're not begging for funds; you're offering your community the opportunity to participate in a project you're passionate about. Telling your story and inviting people to join your entrepreneurial adventure is vital.
Launching an App Through Crowdfunding
While crowdfunding can be used for various business types, reward-based crowdfunding, suitable for start-up projects, might not be the best approach for launching a new app. Consider platforms like Product Hunt, which offer a dedicated space for technology enthusiasts and early adopters to discover and support innovative applications. At a later stage, platforms like Crowdcube or Seedrs can be used for crowdfunding to develop your business further and raise funds.
The Secrets to Crowdfunding Success 💰
With the right approach, crowdfunding campaigns can thrive. Here are three secrets that significantly enhance your chances of success:
Storytelling
Your story should vividly illustrate your entrepreneurial journey, the problem you're solving, and your vision for the future. Storytelling forges a meaningful connection with investors, convincing them to believe in your vision.
Build Social Proof from Day One
Success attracts success. Setting a fundraising goal achievable within the first day is pivotal. It signals to potential backers that your campaign is successful, creating momentum and attracting more support.
Preparation is Essential
Crowdfunding success is not a matter of luck; it's about meticulous preparation. The process often begins at least three months before your campaign launch and involves various phases, from preparation to lead generation, private launch, and the live campaign.
Why Success Rates Differ Across Crowdfunding Types ?
Platforms like Indiegogo may have a 9% success rate, while others boast a 98% success rate. This variation is due to factors such as due diligence, private campaigns before going live, and varying levels of support provided by different platforms.
Empowering Female Founders through Crowdfunding
Empowering female entrepreneurs has been a significant focus in the entrepreneurial landscape. A study from PwC and the Crowdfunding Center highlights that women excel in seed crowdfunding, achieving their financial goals globally. Crowdfunding offers immense potential for women entrepreneurs, enabling them to secure funds for their projects while building a supportive community.
If you're interested in attending We Rise's upcoming events, please check our agenda here.
Start Your Crowdfunding Journey
If you're ready to embark on your crowdfunding journey, request your Free Step-by-Step Crowdfunding Guide and sign up for our newsletter to stay informed about our upcoming practical workshop on building a crowdfunding audience.
Visit SetGo for more insights and resources.
Follow This link to receive your free guide
Don't Miss SetGo's New Podcast on Fundraising Stories
Exciting news! SetGo's launching a podcast dedicated to Fundraising Stories. If you have a fundraising story as a founder, advisor, or angel investor, they'd love to feature it.
Sign up for their newsletter to be informed about the podcast's launch.
Written by Nathalie Peeters, founder of Set Go
Follow her on Linkedin or contact her at nathalie@setgolaunch.com
_________________________
We Rise is a business club designed to stimulate your ideas, and expand your network and opportunities — follow us on Instagram