What is Crowdfunding and Should You Use It to Finance Your Business?

Finance Your Business - Complete Controller

Do you have a great business idea in mind but don’t have the funds or credit to get financing for your startup? Crowdfunding is an option that more entrepreneurs are turning to for financing their startup. You use the internet as the main source to publicize your project and receive support from potential funders. Check out America's Best Bookkeepers

When undertaking any business idea that seems viable, you need two types of support:

  • Technical support
  • Economical support

Technical support and knowledge are essential since entrepreneurs usually do not have enough experience to carry out their project without the corresponding legal, technological or strategic support. Therefore, they must resort to incubators and business accelerators or partner with another company or entrepreneur with such experience.

On the other hand, support in economic terms is essential to carry the project forward. Initially, it is necessary to have a sufficient economic cushion to face the payments during the first months of the business and then remain stable. To cover this first stage, there are many traditional financing options. However, it is not always easy to access them.

Both aspects are important, but the most difficult to achieve is sufficient capital to carry the project forward. Check out America's Best Bookkeepers

Together we make a great team

You have thought out your business. Then you have to estimate the money you will need to carry it out before launching it. One way to go about it is to go on the internet and ask people interested in investing in your idea. Is something like this possible? With crowdfunding, YES!

Crowdfunding means a system based on the idea that many people cooperate to support one project by providing the finance needed to run the project.

It is a young and fast-growing industry that is changing how people manage and spend their money. It also has brought a revolution in the ways with which startups raise capital.

The Global Crowdfunding Report by Massolution predicts crowdfunding to become an industry worth $300 billion by 2025, estimating a compound annual growth rate of 100 percent in the short term.

Five keys to presenting an attractive crowdfunding project

Now that you know ​​about crowdfunding, let’s look at some tips to help you make your project presentation attractive.

Choose a well-thought-out project: You should always study the possibilities that come with your idea, explore all the financial projections, and consider both the best and worst cases. If you believe you can consider crowdfunding, then go to step 2.

Make an excellent presentation: Once you decide on crowdfunding, you must create a good presentation to make yourself known on the web. Do not forget that you are offering something that doesn’t exist, so you need to be creative and build credibility. Check out America's Best Bookkeepers

Select a crowdfunding platform: Think about the most appropriate crowdfunding model according to your idea and select the platform according to your needs.

Diffusion and more diffusion: Use your friends’ influence and anyone who can prove helpful in giving your project increased visibility in your close circle.

Update yourself constantly: Remember to report on your project while the campaign is running. Comment through your media about how the collection is going so that more people are interested in continuing to support you. Do this exercise for as long as the project is published.

What do funders earn?

So far, everything looks perfect. But it is crucial to consider what your investors will earn.

This varies from project to project. It is always smart to know what you are offering to people who finance your project. It will be a very important decision, and there are several possibilities:

– Crowdfunding through donations: The funder who financially supports a project through donations does so without any self-benefit, not expecting a return.

-Person-to-person loan: A system in which a business returns the investment to the investor within a set period and with an interest charge.

-Participation in the capital: under this system, the financier becomes a shareholder of the company. This type of crowdfunding is the one with the greatest potential to finance startups.

-Rewards: in this case, you request the money in exchange for the final product as an advance sale. It can also be a gesture, such as a thank you letter, a meal out, a product that the company will create with the requested funding, etc.


Crowdfunding is an equal and democratic opportunity for all kinds of people to fulfill their dreams of creating new projects or companies. Now there are no excuses for not carrying out your business idea.

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