Is crowd funding the right choice for my business?
Crowdfunding is one of those modern trends that, just a few years ago, we likely couldn't imagine being as big as it is today. Whether it's asking for donations for a charity or to pay for an expensive medical treatment, or as part of the financing portion of your overall business development plan, crowdfunding is something that every burgeoning Australian startup should consider.
But how do you know if its the right choice for your business?
The gauntlet of the public arena
First and foremost, you have to remember that crowdfunding is a public-centric financing option. While venture capitalist and angel investors will likely have expert knowledge on your potential industry or product, the public likely does not.
To that end, you have to be unique. If you want to open a supermarket, a standard retail store or a business that is essential to the economy but does not have that "wow" factor, you may find yourself falling by the wayside compared to other offerings. There's only so many investment dollars in the market, and you have to beat everyone else.
Play to your strengths
On the other hand, if you think you've got a product or idea that will grip the public, you can find yourself with more capital than you know what to do with. For example, the Australian GoFar car monitoring app received quadruple its crowdfunding target within 50 hours.
However, it's also important that crowdfunding makes you beholden to the public, not a lender. While lenders do this professionally and may be more understanding of business hurdles, the public are less likely to be. Keep this in mind when considering crowdfunding as a financing method.
When it comes to your business, it pays to have the right planning in place. Whether you've just started and are looking to the near future or an established business looking to grow, get into contact with the team at Wilson Porter and find out how we can take your business to the next level.