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3 reasons you should crowdfund your business
As the crowdfunding trend continues to expand, with 191 platforms in the United States alone, the face of todays entrepreneur is evolving. Here are three reasons to consider using crowdfunding to develop your business. - photo by Amy Osmond Cook
Canadian-born Joanna Griffiths knew she had a good idea. As the founder of Knix Wear, a unique underwear line that creates a drier and more comfortable fit for active women, she knew there was a market for her product and that the process of acquiring funding would be challenging. But as her marketing campaign hit social media and other public outlets through Indiegogo, 518 people investing a total of $60,450 helped her launch her clothing line.

As the crowdfunding trend continues to expand, with 191 platforms in the United States alone, the face of todays entrepreneur is evolving. People with big ideas and limited resources have a platform on which to design and develop their products.

Here are three reasons to consider using crowdfunding to develop your business.

1. Crowdfunding allows you to connect directly with your customers

Twenty years ago, small corporate teams decided which toys would appeal to children, which kitchen appliances would be available to homemakers and which logos would appeal to sports enthusiasts. Now, students, moms, geeks and super fans are marketing to each other.

As one of Brazils 10 female tech entrepreneurs making a difference in the South American country, Candice Pascoal understood the need to reach out to women and mothers who shared her life experience. Having already excelled in the corporate and music business world, Candice launched an interactive self-help site called the Masters Channel as a new mom working from home.

In seven months, we had a community of 30,000 people, she told Forbes. They told us wed saved their lives; theyd lost weight; they were always looking to what was next on the channel.

The knowledge she gained from that experience, along with her various careers, inspired her and brother, Diogo, to launch Kickante, a crowdfunding site that allows the resourceful people of Brazil to develop and promote their own ideas.

Our goal was not to do just crowdfunding, Pascoal explained. We wanted to empower Brazilians and help transform society.

In less than two years, Kickante has hosted over 8,000 campaigns on behalf of artists, charities and entrepreneurs, raising a total 14 million reais ($4.1 million dollars) from 200,000 donors.

2. Crowdfunding creates a marketable voice for charitable causes

A common dilemma of a charity with limited funding is the need to divert funds directly supporting the cause to cover expensive marketing costs. Crowdfunding eliminates that problem, as foundations can promote at unprecedented levels of exposure with minimal costs and exciting earning potential.

If youve ever gotten an invite to support someones Race for the Cure or called in to support a PBS fundraising event, youve been part of a crowdfunding campaign, explained contributor Wil Schroter in the article, "Why crowdfunding websites work."

Charities are a natural fit for crowdfunding because they tap into peoples natural affinity to support causes they believe in. Combined with a well-conceived social marketing plan, a crowdfunding campaign can generate more buzz than a very expensive publicity tour.

3. You have a second chance to make a first impression

Unlike a typical pitch (e.g., Sharktank), a crowdfunding campaign allows entrepreneurs to adjust or pivot their branding/products/strategies in response to direct feedback.

Indiegogo, for example, promotes itself as a way to test the strength of an idea and engage with like-minded individuals. Kickante promotes different campaign strategies that best fit the entrepreneurs goals by offering data analytics and best-practices tips and outreach. They also instruct entrepreneurs on ways to effectively use YouTube and other forms of social media for maximum reach. Crowdfunding sites want your campaign to be successful, and they are committed to providing resources that increase your chance for success.

Crowdfunding is here to stay, and the platforms ability to connect people with common interests, build a voice for meaningful causes and develop new ideas over time are three reasons that you may want to try crowdfunding your next business idea. We all have good ideas, and crowdfunding gives us the ability to see, hear and evaluate them.