If you’ve launched an app before, probably you have the idea of efforts required to develop and promote without earning any money out of it.
…or not sufficient to validate the amount of work.
When it comes to your idea of the next great app, you may not be willing to put the sweat and tears again. However, if you have faith in your app’s potential and want to work with lower the risk, get it funded seems to be a great idea.

When it comes to your idea of the next great app, you may not be willing to put the sweat and tears again. However, if you have faith in your app’s potential and want to work with lower the risk, get it funded seems to be a great idea.

What is Crowdfunding?

Crowdfunding

Crowd means people, group of general or specific people and Funding means sourcing money, financing, backing and supporting. Crowdfunding is a process of involving others to raise money for a project which could be a product creation or a start-up/business and more. It’s highly beneficial for budding entrepreneurs and banishes the overbearing investments that most of the start-ups’ experience before they have even started and get stuck otherwise. Crowdfunding is the most benefiting method of raising capital for a non-profit these days.

There are a lot of existing charity, donation, and investment platforms today, but the most commendable are Kickstarter and Indiegogo for their rewards-based crowdfunding where a reward is linked to a project or a cause that you are supporting and you give money in return for it.

Why has Crowdfunding been so Successful?

consumer–business

As we know, these days’ people shop on e-commerce sites more than they shop at the local stores. So, looking at the advancement and huge expansion of e-commerce, almost everyone has this luxury to buy about anything with a click through their digital devices like Smartphone’s, Tablets or Laptops.

Nowadays consumers have better choices, and the consumer–business relationship has been democratized. So, small startups with more personal relations are being opted by the customers, people who are the early adopters are actively participating in the success of startups. Along with that, the entrepreneurs are also now able to finance the businesses utilizing the crowdfunding instead.

Crowdfunding for App Entrepreneurs

It’s crucial to understand and opt for a suitable platform if you as an Entrepreneur have decided to crowdfund your app so you can increase the chances. There are three different ways to know about crowdfunding eco-system which include equity, donations, and rewards-based crowdfunding that too come with their positive and negative sides.

Below is a list of a few of these platforms:

  •    Kickstarter
  •    Indiegogo
  •    Appsfunder
  •    Crowdfunder
  •    Crowdrise etc.

Type of Campaigns:

Crowdfunding vector concept

Charitable campaigns: These donation campaigns take a stand to make a difference. A few sites, for example, CrowdRise, GoFundMe, and Razoo. are really strong platforms for the donations that don’t have any obligations from investor or backer allowing people to raise funds to start their projects and make a change.

Equity campaigns: This is an unavoidable funding campaign idea especially for the future growth (please refer to the JOBS Act for more) along with backers getting a share of the business. Equity platforms such as CircleUp, AngelList, and Crowdfunder. have networks globally and they are integrating investors and entrepreneurs who are in need of finance.Also, to have the authorized interest and funding chances, Equity crowdfunding efforts need to have a stronger grip and a track record.

Rewards-based Crowdfunding: What exactly happens in case of rewards-based crowdfunding is that the startups “presale” the products so they can finance their product manufacturing. Although a fair amount of Rewards-based crowdfunding sites are there, for example, RocketHub, AppBackr, Quirky, and Tilt exist. The most successful among them are Kickstarter and Indiegogo.

Strategies to Increase Funding:

Strategies to Increase Funding

Increase perceived value: In order to convert more customers (once the product is created) and be able to gain more for the business or product, it’s critical to add perceived value. It could be done by the provision of some products like SaaS that are cost-effective to scale and to maintain per-user basis.

SHADOW | Community of Dreamers is one such start-up where the creators raised $82,577 from 3,784 backers by adding a level of exclusivity to the rewards and project.

  • Offer Related Rewards: It is one of the most famous strategies used by the crowdfunders to increase rewards. When your product or brand is yet to be properly established, it’s not advisable to announce rewards that are not relative to your campaign. In order to add value to your reward scheme, add complementary products to help get more funding.
  • Early Beta Access: Early accessing crowdfunders and backers help software startups with legitimacy. One such example is Minuum, Android keyboard which was launched in March 2013 on Indiegogo that helped consumers save space on their mobile screens. The campaign raised $87,354 with 9,645 backers. Isn’t that great?
  • Leverage an audience: In order to start a business or launch a product, it’s important for it to appeal to the consumers so that the trust could be established and also to add value. This way the pitch becomes easy, and there are increased chances of sales. One way is to get social influencers on board and hire them for product or service reviews or testimonials and utilize the same for leveraging consumers.

Crowdfunding Resources

There are a lot of considerable podcasts, websites, and other reference stuff that can assist. There are many crowdfunding agencies or resources that can yield discussing in common, together with performing particular tasks, like making your video, plotting your page, giving rise to leads, setting up a social media pages or developing strategies to market your project after it has begun.

Just like social media, crowdfunding is a legitimate resource of creative enterprise, its effectiveness is dependent, upon one’s ability to use it. There are two distinct ways of Crowdfunding.

Offline: In Offline crowdfunding, you can make calls to peoples, distribute flyers, door to door marketing, News-paper ads, classified ads, and all other means of offline marketing.

Online: This type has two subtypes, and fundraisers raise funds mostly via crowdfunding portals, social media, online marketing, etc.

Here, we are listing some of the best Online Crowdfunding websites to choose from:

Crowdfunding Resources

  • Kickstarter: Kickstarter is one of the earliest platform sites for creative project raises donation-based funding and has experienced strong growth and many break-out large campaigns in the last few years.
  • Indiegogo: Indiegogo has started early in the industry, they are well-known because of their flexibility, international growth, and broad approach. They approve donation-based funding for whatever you think of except investment.
  • Crowdfunder: Crowdfunder is one of the largest and fastest growing networks of investors.
  • RocketHub: RocketHub offers donation-based funding for a wide variety of creative projects.
  • Crowdrise: Crowdrise is a good place for donation-based funding for genesis and non-profit organization.
  • SoMoLend: Somolend is for the sites with small businesses in the US, providing funding to qualified businesses.
  • AngelList: It is especially for the tech startup with shiny lead investors. And many more websites are there.

The reason why we have selected these sites from hundreds of the crowdfunding sites is that they have a huge experience in raising funds and their platform has a good size of the audience to get the initial boost for the campaign. These sites offer you 24×7 customer support throughout your campaign. These sites accept donations from various payment gateway and have many more features.

Final thoughts:
Throughout this article, we have discussed what is crowdfunding?, Strategies to increase crowdfunding, What are the resources and methods of crowdfunding?
Crowdfunding can make or break a startup. There are two separate activities – you first find investors & raise money, and then you would allocate your marketing spend. Crowdfunding has offered new avenues for startups, and it is relatively easier to start a business than ever before.
With this brisk success, there is no doubt that the crowdfunding concept is going to proceed and will ideally help your campaigns work more efficiently.
So, covering both the positive and negative sides of app-based crowdfunding, it can be concluded that the concept of crowdfunding and these strategies could work effectively, if used in a proper manner and bring success for budding Entrepreneurs.

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