If you require capital for getting the business started, it is a good idea to choose to crowd-fund for raising the funds. Contacting the venture capitalists or the angel investors is definitely a stressful job. You will require a strong pitch deck and there is going to be no guarantee that you will get the funding that is required. Moreover, at certain times, you might get the funding, but there is a high chance that you have to give a portion of the ownership of the business or the control of the business for getting that funding. According to www.blog.fundly.com, the industry of crowdfunding is going to grow by almost $300 billion by the year 2025.

However, there is something else that you need to understand. Crowdfunding might be lucrative, but it is not always going to be the ideal solution for each and every entrepreneur. It is crucial that you start familiarizing yourself with the various advantages as well as disadvantages that are associated with crowdfunding before you take a final decision.

An overview

Crowdfunding is a unique process, which is associated with gathering funds for the business venture through multiple contributors, with the help of reputed platforms. There are numerous platforms and every platform has their unique requirements, but mostly, you have to create a proper project for the business venture, request a certain amount of money, and rely on the individual donation or contributions for meeting the goal that you have. You also have the option of giving rewards to the contributors at certain donation levels, like free products, when they have contributed more than 25 dollars or even more.

The advantages associated

Given below is a list of the advantages that are associated with crowdfunding. You can also opt for debt consolidation if you are in debt, but ensure that you are going through the debt consolidation reviews first.

Accessibility and speed: You do not require special qualifications for starting your crowdfunding campaign. Also, it is not extremely hard to create the campaign from a single scratch. Within a single hour, you will understand the basics, which are associated with the outlined page of your business. Then, you can make this particular page visible to the audience of the crowdfunding platform. There is no need to provide presentations or even hunt down the venture capitalists and you will also not require a strong business plan for getting started.

Marketability: As soon as the page has been established, you have the option of increasing the total number of people that you are going to reach through numerous marketing strategies. You have the freedom of mastering SEO in order to ensure that the page is ranking high for all the relevant searches. Create videos, which are capable of highlighting as to how the products work or you can also trust paid advertising for spreading word about the brand. You are going to get unlimited flexibility.

Community and feedback: When you are launching your crowdfunding campaign, it is obvious that you are going to share your products as well as the business idea, with almost every people whom you are interacting with. This is going to provide you with the opportunity of receiving feedback. The early contributors are responsible for pointing out the weaknesses in the ideas, which they want to be fixed. They can also suggest new ideas, which can help in improving the business model.

Complete control: Unlike the other methods of investment, you do not have to lose control of the business venture when you are raising funds. You have the option of deciding the structure of your campaign, include the total amount that you are going to ask, and decide the manner in which you are interested in running your company.

Customer attraction: Marketing the crowdfunding campaign is a unique manner of building momentum as well as interest in the brand. This is considered to be a market test in order to understand if the idea that you have, is viable.

The disadvantages associated

There are certain disadvantages associated as well and you need to know about them.

Scrutiny: You might have a great idea but it definitely does not mean that it will be accepted by the crowdfunding platform, which you have selected. It is true that few of the platforms are easy going and open, but various other platforms are responsible for certain stringent rules. If you are not capable of meeting all the requirements, there is a chance that the campaign is never going to be seen.

Competition: If the campaign has been accepted, you have to accept the fact that you will be facing stiff competition. Crowdfunding is extremely popular because of all the advantages that it has and also, it is easily accessible. Countless projects are constantly going on in the major platforms. Crafting a place for your business venture is going to require a proper attack plan, along with a smart way of differentiating yourself and your business venture from the closest competitors.

Meeting threshold: On some of the crowdfunding platforms, you have to set a particular threshold for the brand, which includes an objective, and if that objective is met, you might receive the funding. The disadvantage here is the fact that if the business venture is not capable of meeting the threshold, you are not going to get money, even from those people who pledged donations already. However, all the crowdfunding platforms do not have this system, and it is crucial that you study before you select a platform.

Fees: Most of the crowdfunding platforms are going to take a certain percentage of your total contributions. This fee is definitely going to be minimal, but it is going to reduce the total money that you are going to get for your business venture.

Leaking information: There is a chance that you are going to leak important information about the products. For instance, if you show off a particular prototype online, it is going to open up the door for copycats. Therefore, it can be an unsafe option.


Crowdfunding may not be appropriate for all the entrepreneurs or businesses, and hence you need to ensure that you are considering the options that you have before you are proceeding. Understand all the weaknesses as well as the strengths that are associated with crowdfunding, and then finalize your decision.