Those of you following the tech and social scene know all about the latest buzz word: Crowdfunding. Kickstarter is the most heard about example, but there are other platforms that are introducing us to a new way of acquiring funding for our dreams, passions, and ideas.
You may have seen me talk about this recently with the launch of Fundable, a Columbus-based crowdfunding platform focused on helping startups get the money they need to… well… start up. Brilliant idea to make a name for themselves during this digital fundraising phenomena by working solely with a fast-growing niche like entrepreneurs. But if you’re a business looking for cash, how can you figure out whether Fundable or any crowdfunding is a good option for you?
I started analyzing some of the startups raising money, particularly Purge. Purge is an app-to-be that wants to help you sell your stuff easily and efficiently. Think Craigslist but not as creepy and even more effective. They came to be at a Startup Weekend gathering here in Columbus which led to being one of the first projects to join Fundable to raise money.
My first thought with Purge was why in the world would anyone want to contribute money to an app that’s not available yet? The competition in the app store is crazy high, and I don’t even like to spend $0.99 on a download. Much less give a $25.00 donation. I’m more likely to find something new and cool to download and sell all my stuff online. Inefficiently, but immediately.
But then I started realizing how actually kinda brilliant it is for Purge to get their start through crowdfunding. It’s an instant community builder:
- First, people love good ideas. If you come up with a solution to their problem, they are happy to help you in any way they can. So since Purge is offering that to you and their current call-to-action is to donate in order to make it possible, that’s what the brand’s new fans are going to do.
- Also, to be just another app in the app store sucks. You really need to bust ass to get attention over the competition. But with Purge starting their efforts on Fundable, they’re gaining instant access to end users who will be anticipating the launch. Not to mention, $25.00+ backers get to have themselves and 25 of their friends join the network once it hits the beta period. Early adopters are all in for the chance at exclusivity.
- And just to play devils advocate, let’s say Purge doesn’t reach their goal by the end of the fundraising period. It was still time better spent than searching for a traditional funding source like a bank loan or investor first. They might need to resort to one of those options now, but they’ll be doing it with the community of fans they’ve built during their time crowdfunding on the Fundable network. And that’s an attractive thing to bring to the table: ready-to-buy fans.