Crowdfunding is a modern, non-traditional approach to raise funds for new ideas and has dramatically increased in popularity on social media and online platforms. It gives you, the entrepreneur, a single platform to build, showcase and pitch your new idea to friends, family, customers and potential investors. It is the process of raising small amounts of money from a large number of investors and is primarily done through social media.
Many great ideas are supported by crowdfunding, but sometimes those funds are not enough to start a business. The Mountain Association wants to help you fill in the gap. Our CrowdMatch loan is a unique product available to entrepreneurs who run a successful campaign. We will match dollar for dollar-up to $10,000-the amount you raise through crowdfunding, with no credit check for eligible enterprises.
This blog is a short guide to explore crowdfunding and our CrowdMatch loan as options:
How do I know if crowdfunding is right for me?
You have a new product idea.
Crowdfunding is a great way to see if there is market interest in your product before you invest in production. If your campaign is a success, you know that you have found a solution to a legitimate problem.
You haven’t built a reputation yet.
If you are pre-revenue and need to build your social capital, a successful crowdfunding campaign will make you look more attractive to bigger investors. An investor likes to see that the market supports your company.
You want to keep your financial risk low.
Campaigns are a way to share your financial risk with your community. Supporters donate or lend you money for your project, so you don’t have to come up with the total amount.
You want to build your target audience.
Crowdfunding gives you a great platform to tell your story. You can connect with people in a personal way that isn’t as simple in a brick-and-mortar or ecommerce store. Once you build a community of early-adopters, they will be your champions and spread the word about your business.
You need that extra push of accountability.
It’s easy to come up with an idea that never leaves the drawing board. But once your campaign is live, you have a whole host of supporters that will keep you accountable to deadlines and give valuable feedback.
If I decide to go with crowdfunding, how does the Mountain Association’s CrowdMatch loan work?
Our CrowdMatch loans are pre-approved, which means that you are conditionally approved for a microloan if you complete a crowdfunding campaign. Apply for a CrowdMatch loan before you start your campaign, so we can go over requirements with you and make sure your idea qualifies with our loan requirements. Then once you meet your crowdfunding campaign goal, we can start working on your loan closing.
Additional Resources:
- Crowdfundinghacks.com is a great resource with in-depth information on crowdfunding. This article is particularly good for determining whether or not your business is suited to crowdfunding.
- Introduction to Crowdfunding for Entrepreneurs is a 30-minute webinar published by the Small Business Administration (SBA) outlining the basics of getting started in crowdfunding.
- Each crowdfunding platform offers extensive guides with a wealth of information on how to make your campaign successful. Here are just a few:
- Indiegogo: The Essential Guide to Crowdfunding
- Kickstarter: Creative Handbook
- GoFundMe: Fundraiser Toolkit
- Kiva: FAQ
- Fundable: Crowdfunding Guide
- The Local Crowd
- Success stories for our CrowdMatch loan: Native Bagel in Berea, Kentucky & Four Sisters in Richmond, Kentucky
