Crowdfunding a good idea? You must really have a true story | Currently

Crowdfunding literally means: getting money from the general public. You tell as many people as possible about your plans and ask if they want to invest in them. But how do you ensure the success of crowdfunding, and is asking for money inconvenient?

“I got a little crazy asking for money,” says 31-year-old Karen Ertracher. “You would have preferred to pay for everything yourself, but I didn’t have that financial space.” The original New Yorker lived in The Hague for 4.5 years and dreamed of a coffee shop with real New York cakes.

Online crowdfunding campaign started. And with success: the 15,000-euro target was more than achieved. In the end, she received 30,000 euros from 75 people, including some loans.

“I have really benefited from my existing network and offered various options for donations, such as refund or reward. For example through a bread making workshop.”

Easy way to raise money

There are four forms of crowdfunding. “Based on donations, a bonus in return, and a loan in exchange for interest or shares,” says independent consultant Bert Wams. According to him, it is increasingly used by businessmen. “They are looking for financing to start or expand their business. That way they are less dependent on the bank.”

“It’s an accessible way to fund a new idea or product,” he adds. “Investors can start from a few dozen inside. Plus, given the low interest rate, it can be an interesting alternative to savings.”

Additionally, Wams finds that people also enjoy investing in a company from a social perspective. “For example, a nearby bakery or a nice coffee shop they help make. Crowdfunding creates a special bond between your company and the people who invest money in it. They often become loyal customers.”

So it is socially acceptable to start crowdfunding. “You can see that as a kind of aggregation where people choose to give themselves,” Wams says. “But it depends on the goal. Trying to fund your trip around the world is very different from medical crowdfunding to treat a disease.”

You must have a good network

Entrepreneurs start their campaign via an online crowdfunding platform. CrowdAboutNow Director Mark Lajeward stresses the importance of the personal and network mission to the success of the campaign.

“People often think it’s their own network, but most campaigns are particularly successful with a network of fans, customers, and partners. You really have to have a real story,” Lajeward says. “Tell people what you do and why it’s important.”

“80 percent of the campaigns launched successfully completed their crowdfunding with us,” he says. “The majority of the 20 percent who don’t, don’t make it into a network. Trust from this first group is also needed to reach new people and get them to invest.”

Marianne Kimmel, 50, from Sint Maarten also knows the campaign can’t work. “We’re crowdfunding where we’re definitely not going to hit the target,” she says. “It’s for the Project Speak Now Foundation, which is committed to sexual assault victims.”

Although she’s put time and attention into it, it’s hard to get started. “It’s still a taboo and people don’t like being associated with this topic, so they donate anonymously and the story isn’t told.” Kimmel had hoped that the fundraising would succeed. “It’s a shame, but we’re still happy with any small amount.”

Would you also like to raise money for a good cause or company? These five tips will help you on your way:

1. Start with a clear and true story. This promotion explains the purpose of the project, what will happen with the money, and what the potential rewards or fees are for investors. Also, don’t forget to mention the risks.
2. Always check if the required amount is possible within the planned time. Also calculate the minimum number of people required for this.
3. Having an online and offline community is very important in crowdfunding. Mobilize your own network first and make sure everyone is informed. Those first investments and potential donations inspire confidence in others.
4. Use social media to draw attention to your campaign in the photo and story.
5. Bring the people who support your campaign with you. For example, by telling us about your progress. This is how you keep sharing.