Crowdfunding's one of those magical ideas that lightning-bolts its way into the business world every so often. The continuing explosion of the internet and the speed with which traditional lending institutions have been sucking their heads back into their shells have left a gaping hole in the funding arena, and a whole new way of raising finance has grabbed itself a foothold.
It's actually all pretty simple in principle. Instead of asking a single investor to stump up the full amount you're looking for all at once, you're approaching a much larger number of people for smaller amounts each. If you're trying to raise finance for a venture that might be considered too risky, too unproven or even just too weird by the Big Guys, you're no longer stuck if they can't appreciate your vision. By pitching "lower and wider" you could stand a much stronger chance of raising what you need to press forward and make a success of your business.
If you're offering a chunk of your business in exchange for the investment, a successful crowdfunding campaign could find you gaining not only the money you needed, but also a large number of spokespeople across the internet, each of them excited about the investment they've made and keen to tell the world about it. The government's been pretty supportive of crowdfunding initiatives, so those spokespeople will probably also be excited about the tax relief and other rewards they've found themselves with - particularly if you're a start-up business.
Crowdfunding's a pretty huge subject , and it's definitely worth going into it with your eyes open. A lot of novice entrepreneurs have learned the hard way that this isn't just free money - and a poorly thought-out plan could easily mean that your business fails even if your crowdfunding succeeds.
It's all about getting the right guidance from the very start, so get in touch with RIFT Accounting and let us walk you through this exciting new fundraising landscape.