What is Crowdfunding? | HubSpot Marketing

I was kind of reluctant and hesitant to raise money during a pandemic. I wanted to be more empathetic to what was going on in the world, but I also had to capitalize my business.

Welcome to another lovely episode of Breaking the Blueprint, your number one spot for underrepresented groups to find creative solutions to unique problems straight from the minds of those who have lived it. I'm your host, Tory. Aw, come on, guys. Really? For me? Come on. Stop it. Crowdfunding is becoming an increasingly popular way for entrepreneurs to funnel their business dreams. In this video, we're going to hear from an entrepreneur whose crowdfunding efforts raised $2 million during a global crisis. I'm going to break down what crowdfunding actually is, and I'm going to share nine crowdfunding tips that will get your business funded in no time. If you want to check out 23 of the best platforms to start crowdfunding for your business right now, just click the link in the description. Do you taste that value? Crowdfunding is the practice of funding a project or venture by raising small amounts of money from a large group of people. In modern times, this typically takes place via the Internet. Crowdfunding is a form of crowdsourcing and alternative finance. Alternative is a great word to use here because crowdfunding is a valid option for entrepreneurs who are having a little bit of trouble raising funds in the traditional sense. While crowdfunding is a viable option, how do we navigate it? Well, we start by talking to someone who's already walked that path. Let's go. Let's go. Let's go to Ohio.

My name is Dawn Dixon apogene. I'm a five times founder. I'm the current CEO of Papa, and we've raised over $2 million for our company.

Dawn, it is an extreme pleasure to have you. Let's jump right into it. What's popcom?

Popcom is an automated retail technology company with a software solution to revolutionize the industry. So basically, we make vending machines and kiosks Smarter. I started PopCom really out of a problem that I experienced as a retailer myself, selling my shoes flat out of heels and vending machines. And I found that I wasn't able to collect any data about my customers. I didn't understand conversion rates. I wasn't able to remarket or retarget those customers. I went out looking for a software solution to help myself, but I couldn't find one. And I knew that in order to really grow my business, I needed to develop software that helped me collect information about my customers from the vending machine. No one can do it. So Popcom was born.

And how did you feel about crowdfunding?

Popcom was preparing to raise capital before COVID by doing crowdfunding. At first I was kind of reluctant and hesitant to raise money during Pandemic because I didn't know how people would feel. I wanted to be more empathetic to what was going on in the world, but I also had to capitalize my business. But the complete opposite happened because people were really looking for hope and new opportunities and things to diversify their assets and their income. And so what we did was crowdfund, which we raised over $2 million in that way, relying on the people to help us move forward.

You've been wildly successful with crowdfunding. I'm collecting tips to share with our viewers at the end of this very video. Can you share like your personal three tips on how to raise money with.

Crowdfunding the first thing you must do is understand your business model completely, really deeply understand your margins, understand your customer lifetime value, understand how you're going to make money, and understand how you're going to return the money to investors before you even ask for it. The second thing is really have your due diligence together. A lot of entrepreneurs say they want to raise capital, but they do not have the documents in place to show investors that they can be a good steward of this capital. And then the third thing is really understand your go to market, strategy and competition. Know how you're going to make an impact and what makes your product different and special.

Thanks so much dawn for the knowledge. Now let's combine that with my own recipe to give you nine crowdfunding tips that'll help get your business funded. Number one, Understand your business model. You have to know your company's worth and what to ask for. Number two, have a clear and concise pitch. The average word count for a lot of successful crowdfunding campaigns is between 300 and 500 words. Keep that in mind. 3. Make sure your target audience is clearly defined. 4. Due diligence. 5. Build your network before you launch. There are two types of networks. Friends and family and then the Hail Mary, holders of the big box. In order to attract the latter, you're going to want to have an incredibly tight business plan that lays out not only why you need the money, but how you plan on using it and what's the benefit for them. Click that link in the description to download our very own free business plan template that will help you tighten up your vision if you're not already there. It'll guide you through the steps of writing company descriptions, setting marketing goals, and thinking through financial logistics AKA it'll get you in great ring shape to go and ask for the big bucks. Number 6 Understand your competition. Number 7 Think of your crowdfunding page as a sales page. 8. Have a strong story and make a video. Finally, number nine Offer rewards. Offering incentives not only gives your donors something to remember your campaign by, but but it also encourages them to give even more. Choosing and pricing your reward tiers is an important step in the crowdfunding process. There can be some lower price rewards for people who just want to support you and then some exclusive higher end rewards for the backers with lots of money. Here are some things that you might think about offering $10 gets you a thank you card with a handwritten message from the creator. $25 grants access to exclusive updates on production progress. $40 gets you a personalized art print featuring the backers names and $50 plus gets you exclusive access to an online streaming event. When it comes to raising funds, it can feel like you're moving a mountain. There are a lot of statistics saying that you can't do it, but when it comes to how you should feel about these statistics that say that we can't, I turn to Don for our final thought.

The statistics that everyone throws around about women, black people, minorities, those are. They're relevant to me. I don't internalize those numbers because if I did, I would automatically feel like a failure. Because if someone tells you it's a 0% chance for you to raise money, it's not very encouraging to move forward. So the way that I've been able to succeed is completely ignoring these ridiculous statistics that are really put there to demonstrate to us that we cannot go further than that.

Truer words have never been said. If you like what you heard and want to hear more, subscribe, like and comment on this video to hear more. Until next time, adios. And what were your thoughts on? Well, they're going to be fun in editing. Sorry guys.