There is little doubt today that crowdfunding is a fast growing and widely attractive trend, and for good reason. Billions of US dollars have been donated to causes since the inception of the crowdfunding platform. Dozens of projects that work towards causes like community development and education for underprivileged children are funded and supported on a daily basis on any given top social crowdfunding platform.
Not only do nonprofits and medical causes benefit greatly from the newest trend in the funding industry, but so do startups. The harsh reality may be that most startups fail. Yet, equity crowdfunding, where every donor gets a stake in the company’s worth, continues to grow popular and thousands of startups begin work around the country all year round, funded by enthusiastic investors. And why not? A large number of companies that turned to such a platform for help with funds are a booming success.
Platforms like Indiegogo and Kickstarter see an incredible number of entrepreneurs raising funds to launch their startups and brands that raise funds for their product launches. Ouya, for example, began a fundraising campaign on Kickstarter to fund their new product, a new kind of video game console and managed to raise a whopping US $8.5 million in less than a month. They shipped their product to backers all over the country ten months after the campaign ended. So should you join the herd?
7 reasons you too should consider donating to a fundraiser for a startup
- You could turn $2,000 into $40,000 in just a few years. Yes, really. Perhaps even more, if you have a good eye for a promising campaign. Unfortunately, there is not yet a lot of data you can rely on. An investor who happens upon a campaign that turns out to be something like the next Instagram could make over 300 times the amount he donated!
- Getting in early gives you more influence. Get an active role in the management with your donation and enjoy being a part of the leadership of an exciting and young team doing something new and unique.
- Help create more employment. Everyone wants to work for a promising startup these days. And for good reason – you are thrust the opportunity to wear many hats and an opportunity to grow your career and skills.
- Become a part of a team that needs you. Engage with enthusiastic entrepreneurs and be part of something exciting where you can participate in the advisory and use your skills to aid the startup’s journey.
- Startups are less powerfully affected by large shifts in the market. Introducing private equity is a great way to diversify. Small private brands are generally unaffected by market trends, so play it to your advantage.
- You have a chance to impact the future of a business. Investing in a publicly listed company gives you little power or say in its functions. The case is not the same with a startup, where you can approach the founder directly. Grab the chance to dive into an industry you’re passionate about.
- You have the power to create a social impact. You can use your wealth and skills to fund a social startup that can affect lives and make the world a better place; isn’t that the dream after all? Choose to support an innovation that can improve life quality or a social enterprise that aids the functioning of nonprofits or drives causes.