A well planned and executed crowdfunding campaign is a powerful tool in an entrepreneur’s toolbox.
Without a global pandemic entrepreneurship can be a challenge, but COVID-19 has certainly thrown the proverbial wrench into the entire funding landscape. Where once investors were eager to invest, many are pulling back because of the precarious state of global markets. While 2020 has certainly shaped up to be one challenging year and changed a lot of things, one thing has not changed, your customer is the best investor any entrepreneur can have.
Below are three reasons why Kickstarter is a great option to help launch your startup during the COVID-19 pandemic.
Your Investors are Your Customers
With a crowdfunding campaign, you work directly with your customers. They provide an investment into your startup without requiring an ownership percentage. “Without transfer of ownership, you retain maximum flexibility to design and manufacture features that best serve the needs of future buyers.” (Entrepreneur)
This initial cash influx allows you to fund a prototype or move into manufacturing. Cash flow is always the number one issue for entrepreneurs, and crowdfunding is a way to quickly raise funds while concurrently moving through the product development cycle.
It’s important to note that companies big or small can face capital constraints. It’s not only for self-funded companies or early-stage ventures. (Forbes)
Early Product Design Feedback
Feedback is critical. Feedback from your target marketing early-on in product development is necessary.
You want to know what consumers think about your product. Product features, usability and overall design feedback will help propel your startup to success because you are creating the exact product that your consumers crave. Crowdsourcing lets you tap directly into potential consumers.
Starting a business is expensive, and saving where you can is always beneficial. With a Kickstarter campaign, you truly get free marketing and social media exposure. No paid ads, no gimmicks.
Most supporters are happy to share your Kickstarter campaign online and with each share, your campaign gets in front of more eyes. If you have 100 supporters sharing your campaign, your social reach is now in the thousands. “When running a Kickstarter campaign, it is best to publicize that you have a cofounder, as well as other members of the founding team who bring a unique skill set. Startups with two cofounders (compared to just one founder) raise 30 percent more capital, according to financial firm Fundera.” (Entrepreneur)
This economic downturn doesn’t have to mean disaster for your startup. Tap into your target market with a crowdfunding campaign to propel seed funding, solicit feedback and market your product idea.
Read our other crowdfunding related posts:
- Hardware Startups: Crowdfunding — The Power of ‘The Crowd’
- Four Considerations Before Launching a Crowdfunding Campaign
- Market Validation: Test Your Product Idea Early
- Hardware Startups: Knowing Your Market Segment
3D Innovations is a Product Development Company – from the 3D Design to a fully functional 3D Prototype & Product.