10 Myths about Crowdfunding

10 Myths about Crowdfunding

 

Crowdfunding has become a popular method for obtaining much-needed finance for startups and entrepreneurs. There are many types of Crowdfunding platforms for just about every business venture. The various types of platforms include Reward-Based Crowdfunding, Donation-Based Crowdfunding, Human Resource Crowdfunding, and Equity Based Crowdfunding.

The market of Crowdfunding is only likely to grow. The platform has truly revolutionized the world of finance. There are however, many myths which need to be dispelled in order for business ventures to take advantage of the Crowdfunding platform. Here are the 10 myths about Crowdfunding which need to be debunked.

 

Myth 1: Only for Startups or New Businesses

Many people have a misconception about Crowdfunding and believe that the platform is only for startups or new business ventures. That is only far from the truth which is why the myth needs to be immediately debunked. Crowdfunding is used by all types of companies in different stages to raise capital more effectively and efficiently without the hurdles which come with the traditional banking sector.

 

Myth 2: Complex Regulations

Some businesses think that the regulations are complex to use the Crowdfunding platform but that is not true. Anyone can easily use the platform and be successful.

 

Myth 3: Equity Crowdfunding is looked down upon by Venture Capitalists

The truth is that venture capitalists see that as an advantage for you if use equity Crowdfunding because it shows that customers back you and like your business product or idea.

 

Myth 4: The Limitations to the Cap Table

Another myth which has been thought by people is the fact that the cap table would get ruined for the next round but that is not true because the issue has been fixed by Crowd Safe.

 

Myth 5: Expensive

Another popular myth has been that equity Crowdfunding is expensive but that is not true because there are many platforms which offer many services and the only costs which are mostly needed are for the Crowdfunding campaign.

 

Myth 6: One Can’t Fundraise Through Other Platforms during Equity Crowdfunding

There is no limit to which platforms you can use for Crowdfunding, therefore, one can use Equity Crowdfunding and other platforms simultaneously.

 

Myth 7: Time Consuming To Run a Crowdfunding Campaign

Running a Crowdfunding campaign does not take as much time as one would think which it is completely fine to run the campaign and the business at the same time.

 

Myth 8: Idea is enough to Be Successful

In order to run a successful Crowdfunding campaign, the idea is not enough in order to get funded which is why it is important for startups and entrepreneurs to plan everything in advance besides just the idea. You will need to have a working prototype as well as a forecast of the possible expenses and revenue.

 

Myth 9: Work Only Starts With the Campaign

In order to be successful at Crowdfunding, it is important to have everything in order and your business needs to be ready with results to show to potential investors, which is why it is vital to start work before the campaign does. Start work early in order to prepare for everything.

 

Myth 10: Celebrity Endorsement Will Guarantee Success

Another myth which has been perceived by people is that celebrity endorsement will guarantee success. There is more to it than just celebrities. If you do not have a good concept or idea, then there is no point of wasting money on celebrity endorsements.

Crowdfunding has quickly become a popular option for raising capital by businesses and entrepreneurs. Anyone with a good business idea and commitment will have a great chance of succeeding in fundraising.