As many of you probably know, crowdfunding is a relatively young industry. (Fun Fact: Kapipal was one of the first crowdfunding platforms starting way back in 2009!) But what it lacks in years, it makes up for in funding. Studies estimate that in 2015 the crowdfunding industry surpassed over $35 billion in funds generated. These numbers are expected to increase with each year, so it is no wonder why innovative start-up companies are now incorporating crowdfunding within their investment strategy.
Yet after interviewing a wide variety of start-ups, we discovered that the attractiveness of crowdfunding isn’t entirely related to money. Below, we list some of the less obvious reasons why many start-up companies are utilizing crowdfunding.
Personal Connections with Their Consumer Base
After our interviews were complete, the Kapipal team was stunned (well, sort of J) by the fact that every single start-up company loved how crowdfunding provided an intimate connection with their consumer base. While the details of these connections different for each start-up, the general consensus was that crowdfunding with Kapipal provided the unique opportunity to get direct, immediate feedback from their audience.
One example of this was that through a crowdfunding campaign, a start-up company literally made slight alterations to their product based on direct suggestions from campaign supporters. So not only did the company release a better product, but the consumer received the exact product that they would be interested in. Talk about personalization!
More Creative Freedom
In the traditional funding format, start-ups seek out investors who will provide them with large amounts of money. The investor does this with the assumption that in the long run, they will earn more money than they initially invested.
As you can imagine, this process places quite a heavy burden on the start-up company to make money. Obviously there is nothing wrong with making money, but when that is the absolute goal, then both the product and creativity must be mere secondary concerns.
Crowdfunding completely erases this burden, as start-ups no longer need to rely on the traditional investing structure. By generating funds via online crowdfunding platforms, companies now have the opportunities to be creative by testing a wide variety of products without having to worry about owing any huge investment firm money.
A phrase that we kept hearing over and over from start-ups was, “Kapipal provides us the opportunity to test, and then test again.” One marketing manager even noted that Kapipal “provides the opportunity for us to test and see not only what our audience would want to buy, but what they are passionate about, which are entirely two different things. And from a marketing perspective, the more we can understand our audience’s passions, the better products we can create for them.”
That wraps it up for now, but we will be conducting more interviews – with everyone from individuals seeking a dream vacation to more revolutionary start-up companies – so continue to check our blog and social media accounts to stay up to date on the latest news.
Also, feel free to explore our site or become one of the millions who have started their own crowdfunding campaign. Remember, if you have any questions, you are always more than welcome to drop us a note or simply give us a shout out on Twitter.
Hope you have an amazing weekend!
With the new year soon approaching, there are many new projects underway at Kapipal. Although many of these projects are top secret we are super excited to share with you the unveiling of our newsletter!
Our main objective with this newsletter is to keep people informed on new projects, awesome advancements within Kapipal, and the latest on crowdfunding in general. Our newsletter will also feature unique insights and tips for getting the most out of your current or future crowdfunding project.
Crowdfunding Industry Projected to Boom in 2016
In case you missed it, there was a recent Forbes post stating that crowdfunding is likely to surpass venture capital (VC) in 2016. This is huge news, especially considering that crowdfunding was merely a tiny little sibling to VC only a few years ago.
For example, in 2010, was a pretty small market generating roughly under $900 million in 2010 (you’re probably stunned to see that $900 million is considered a “small market” – trust me, so am I!). Yet four years later, crowdfunding had generated $16 billion dollars, and that number is projected to double in 2015 (in case you’re wondering: the official amount for 2015 will not be released until 2016).
Considering the booming increase, now is a better time than ever to get involved with crowdfunding. If you are curious and don’t know where to start, feel free to explore our site or check out Kapipal’s blog, which features some basic tips for getting started. (More blogs posts and tips are on the way!)
For more personal tips and secrets, join the tens of thousands who have signed up for our newsletter.
With the crowdfunding market set to rocket to unprecedented levels, many campaign creators are digging in and leverage this awesome opportunity to their advantage. So why wait? Join the thousands of others and turn your dreams into a reality today.
Since working at Kapipal, I have seen many crowdfunding projects -- charities, hobbies, startup ideas, music albums, community efforts, gifts, etc. It is amazing to see so many innovative fundraising campaigns.
Many people use the crowdfunding approach to realize their dreams! But the power of crowdfunding does not stop here. The crowdfunding process has helped many people in a short period of time to improve their product ideas, create branding, improve marketing, as well as generate market demand intensively.
A typical example is a band raising money for their next album before production. The audience and fans get a flavor of the new album through the campaign introduction, audio or video. It helps the band to generate market interests, get early feedback from their fans, as well as increase the fans' eagerness to get the album produced by crowdfunding contribution. In a way, the band has already tested the market and created product awareness and demand before completing and shipping out their final product.
This is a very good way to exercise the lean development method for testing out the idea with the launch, learn and adapt process. Even with every social marketing promotion round, it follows the same pattern: launch-learn-adapt to understand what works, what doesn't, and how to improve the promotion to get to the next level. It is a journey of continuous learning. When the crowdfunding campaign finishes, the fundraiser not only has more experience in running a crowdfunding campaign, but surely also much more knowledge on social media marketing and lean product development.
If you want to start a crowdfunding campaign for your dream, our Kapipal Team would be happy to support you on your journey!
This is the official blog of Kapipal. Check back often for updates on what's new at Kapipal, as well as ways to make your campaign shine! As always, we value your feedback, so please don't be shy — comments are encouraged!