SA Crowdfunding Blog

Its an interesting one, crowdfunding. And over the last few years it has both made a big impact on how entrepreneurs, bands, artists and others are funded. It has also certainly divided opinion on just how viable the model of crowdfunding is. One thing that few people are admitting is that crowdfunding can be really hard work. And – a couple of campaigns later – I’m a staunch believer that the most important part of this fund-yourself-golden-carrot is the crowd, not the funding.

A crowd funding campaign is a bit like a wedding cake; it’s all about layers, and if you leave it sitting in the freezer, it won’t get eaten. A successful campaign identifies and engages with its core audience, then moves out beyond it and eventually gathers enough speed of its own that it (you hope) becomes contagious. And secret to all of this really working, is the work that you as the project creator puts in. Over the last 7 months or so, the 7 campaigns which have been successfully funded on StartMe, had one thing in common. They all put an enormous amount of work in - and today they are better of for it.

Published in SA Crowd Funding Blog
Tuesday, 23 October 2012 13:55

10 Great Things About Crowdfunding

With all the talk of crowdfunding as a source of small business funding, art funding and music funding in South Africa, we look at some of the great benefits of getting involved.

1) It provides access to capital.
As an entrepreneur, artist or musician, finding the finance you need to get your project of the ground will be one of the most business challenges that you will face. Provided that you have a great concept and is able to convince others of that, with hard work and allot of networking you will quickly see that you can turn buzz about your business into capital with which you can get started.

2) It reduces risk.
The basic nature of crowdfunding is that small portions of the money needed to start with the received from a many others. The Crowd. So comparing this to the traditional business model where risk is normally taken on by the entrepreneur and either the bank or the one or two investors, clearly in the case there is far less risk for all involved. – A real bonus for entrepreneurship and creativity in general don’t you agree?

3) It’s a great marketing tool
This benefit comes in two parts:
• You all of a suddenly have the greatest excise ever to shamelessly promote your idea to every one everywhere. Your personnel and social network all get to hear about your creativity and you have a real reason to shout your message from the roof tops.

• The crowdfunding platform itself attract allot of interest. Crowdfunding is very newsworthy right now and the media loves it. Radio, press, everyone wants to get involved. Not only will a platform like StartMe promote your projects to everyone who asks but will actively be sharing your opportunity with their networks, in their newsletters and you even get the benefit of their aggressive Search engine marketing campaigns.

Published in SA Crowd Funding Blog
Monday, 24 September 2012 13:16

How to use crowdfunding for business

Until a few years ago, what did you do if you had a brilliant business idea and no bank loan? Perhaps you prayed for a miracle. And now? Well now… you simply crowdfund your business.

Known by many names- crowd sourced capital, crowd financing, and fan funding, crowdfunding is the savior of people with extreme talent but no capital. It is the latest buzz in the world of small entrepreneurship.

It is interesting to note that while the buzz is new, the concept itself is very old. One of the greatest musicians of all time, Beethoven, used crowdfunding to procure funds to compose and play. You, as experts will agree, have an obvious advantage over Beethoven- maybe not in terms of talent, but definitely in terms of opportunities available to you to make your sales pitch heard.

Are you still wondering about what Beethoven never had at his disposal, but you do? Well… the answer is: numerous crowdfunding websites.

So, if you have a brilliant business idea and are high on confidence but, unfortunately, low on cash, make use of online crowdfunding platforms to turn your dreams into reality.

Want to know how you can do this? Read on to find out.

Tips for using crowdfunding for business

Published in SA Crowd Funding Blog
Wednesday, 29 August 2012 15:37

How to Fund a Project with Crowdfunding

It has never been easier to take part in business investing through a group effort to fund a project, and the choices are so varied. Before crowdfunding came onto the scene, investments were in basic commodities and many "safe" ventures with low returns. When you fund a project, it can follow almost any type of endeavor you have an interest and belief in, from household appliances to movies.

Nothing is guaranteed. As we all know from recent events, no investment is a sure thing. Consider the recent FaceBook IPO. This only goes to show once again how volatile stocks can be.

Two Primary Forms of Crowdfunding

Crowdfunding works in two primary ways. Some companies strictly solicit people to fund a project, supplying the seed funding for startup, without having a specific product, service, or idea to promote. This gives the investors a reasonable idea of where their money will be going, but some things remain undecided.

What entices investors into this scenario is how well the crowdfunder sells itself. This often comes from success in other crowdfunding efforts that build a reputation. There may be a board of trustees who choose the actual recipient(s) for the funds under this kind of crowdfunding.

The second primary way to fund a project is to know exactly what you are investing in. Usually, a firm is in charge of raising the money needed, and its other place in the investment scheme is to educate investors in both what they can expect to receive on return and what the associated risks are.

Investors may know the person or group personally for whom the money is being raised. Often, an investor feels so strongly about the possibilities of a new product or service that they will take the lead in the crowdfunding effort. There is no license necessary to solicit people to invest.

Published in SA Crowd Funding Blog

A cattle farmer in Southern Limpopo utilizes crowdfunding to aid in pre-selling his beef. He has found it to be a way to re-grow his herd after the mad cow epidemic. This is just one indicator why business finance is morphing from the old ways to more creative ones.

At one time, crowdfunding was simply a vehicle for movie makers or artists to fund their projects, and then as if a revelation occurred, the trend caught on and many others began to seek project funding in this way.

A positive result to come from global economic woes is the general understanding that banks aren't as powerful as people once thought they were. Many big names in finance are no more, and it is evident that changes in banking have only made it more difficult to arrange loans with the remaining institutions.

Business finance through banks has always operated under the concept that the person with money was the only one who could borrow money. There was a phase when the lenders were more lenient with credit and looked the other way regarding some business finance situations that were questionable. Those days are in the past and it is unlikely that they will return.

Published in SA Crowd Funding Blog

Ask and thou shall receive. Within this simple idea lies the essence of crowdfunding. We re use t ask family and sometimes friends for advice, favours and sometimes cash and crowd funding has taken this last idea much further. If you are starting a business or creative project and don’t mind giving something in return to those willing to help you get started then crowdfunding is for you.

So where do you start? Well you have actually already started by finding Startme, the South African crowdfunding portal everyone is talking about. Now all you have to do is get your idea and promotional material in order, post your opportunity or project and wait for the funds to start coming in.

The basics of crowdfunding are simple: get a lot of people to each give you a small amount of money, until like a mountain stream filling with melting snow it becomes a torrent of cash. The trick is melting the first bit of snow and starting the stream. In the mountains, spring comes naturally. In crowdfunding, nothing comes naturally and it is all work and persuasion.

You, as a project creator, have developed a great project that everyone you meet agrees is fantastic. The next big step is listing your project and starting to collect the funds.

Published in SA Crowd Funding Blog

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