Indiegogo raised more money in a shorter period in 2012
If you’re unsure about using crowdsourcing methods to obtain capital for your business, let Indiegogo.com’s success in 2012 serve as an incentive to take the plunge. Campaigns operated through the site raised 20 percent more than those in 2011 and many did so in a shorter period of time. On top of that, more than half were successful in raising the full amount they set out to obtain. These metrics should spur small business owners to take a look at their current capital search strategy and seriously consider implementing crowdfunding efforts.
When it comes to money, it’s understandable for business owners to lean towards sources that are traditional, tried and true. However these funding mainstays are tightening their purse strings as evidenced by the increase in the number of rejected business loan applications. This decrease in available funding isn’t because businesses aren’t worthy, but that banks are becoming more stringent in the amount of money they’re willing to release to entrepreneurs and consumers in general, although business owners are having more luck with smaller lenders. With lower interest rates available for savings and money market accounts, and fees for activities that used to be free, banks are erring on the side of caution rather than risk.
Indiegogo: thinking outside of the box
In the spirit of innovation, business owners should think outside of the box, and supplement traditional loan and bank applications with crowdfunding efforts as well. When you’re fighting to get your business started, sometimes you have to use guerilla marketing tactics and take an unconventional approach to gain visibility and support for your company. All of the contacts you’ve made through networking with industry professionals, friends and peers can result in money raised if you utilize a crowdfunding vehicle to collect donations from the people who are sold on your plan.
The numbers from Indiegogo’s past year show it’s taking shorter amounts of time and fewer people to successfully reach fundraising goals, and that a third of investors are donating without requesting equity within the company (which you don’t see happening very often). Not saying this is a no brainer, but as an entrepreneur, you need to exhaust every option possible to get the capital you need. It’s fine to go the route of a bank – but it doesn’t hurt to increase your chances and generate interest and donations from friends, peers and other contributors.