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The Advantages of Crowdfunding: Consider This Funding Option

Crowdfunding is a popular fundraising method that has recently gained immense popularity. It involves raising small amounts of capital from many people through an online platform. The funds raised can support various projects, causes, or business ventures. Crowdfunding has several advantages, making it a compelling funding option for entrepreneurs and individuals looking to raise money. This article will explore the advantages of crowdfunding and why it can be a viable funding option for your project or venture. By the end of this article, you will better understand the benefits of crowdfunding and why you should consider it for your fundraising needs.


What is Crowdfunding?

Crowdfunding is a funding method that involves raising small amounts of money from many people through an online platform. It is a way to finance a project, business venture, or creative endeavour by tapping into a large pool of individuals who contribute varying amounts of money. Crowdfunding platforms provide a space for individuals, entrepreneurs, and businesses to pitch their ideas, showcase their projects, and appeal for funds from the public. The funds raised can be used for various purposes, such as developing a product, financing a social cause, or supporting a creative project. Crowdfunding can be a great way for motivated and creative teens with business ideas to gain the financial support they need to turn their dreams into reality.


How Does Crowdfunding Work?

Crowdfunding connects people who need funds with those willing to invest in their project or idea. Here is how it typically works:

  1. Choose a crowdfunding platform: Several crowdfunding platforms are available, each with unique features and fee structure. Choose a platform that suits your fundraising needs and create an account.
  2. Create a campaign: Once you have created an account, you must create a campaign that describes your project, the amount of funding you need, and what you plan to do with the money. You can also add photos, videos, and other materials to make your campaign attractive to potential backers.
  3. Set a funding goal: You will need to set a funding goal that indicates the amount of money you need to raise to finance your project. This goal should be realistic and achievable, as it will determine whether or not you receive any funds.
  4. Launch your campaign: Once it is life, you can promote it through social media, email, and other channels. It’s essential to keep your backers engaged throughout the campaign by providing regular updates and answering any questions they may have.
  5. Receive funds: If your campaign is flourishing and you reach your funding goal, the crowdfunding platform will transfer the funds to your account minus any fees the platform charges.
  6. Deliver rewards: If you offer rewards to your backers, such as early access to your product or a personalised thank-you note, you must deliver these rewards as promised.


The Advantages of Crowdfunding

Increased Visibility

One of the most significant advantages of crowdfunding is the increased visibility it offers to your project or idea. When you create a crowdfunding campaign, you can showcase your project to a broad audience, including potential customers, investors, and media outlets. Sharing your campaign on social media, email, and other channels lets you reach many people interested in supporting your project.

There are several examples of successful crowdfunding campaigns that have gained widespread visibility and support. For instance, the Pebble Time smartwatch project raised over $20 million on Kickstarter, making it one of the most successful crowdfunding campaigns. The Oculus Rift virtual reality headset also gained significant visibility through its crowdfunding campaign, which helped it secure a $2 billion acquisition by Facebook.

The increased visibility can have several benefits for your crowdfunding campaign:

  1. Attracting more backers to your campaign can help you reach your funding goal.
  2. It can generate buzz around your project or idea, which can help you gain more exposure in the media and among potential customers.
  3. It can help you build a community of supporters interested in your project and willing to provide feedback or invest in your future endeavours.

Finally, increased visibility is a crucial advantage of crowdfunding that can help you gain exposure for your project, attract more backers, and build a community of supporters. By leveraging the power of social media and other online channels, you can reach a broad audience and generate buzz around your project, increasing your chances of success.



Traditional fundraising methods, such as bank loans or venture capital, can be expensive and difficult to obtain. Crowdfunding, on the other hand, allows you to raise funds from a large pool of individuals who are interested in supporting your project. It can be much more cost effective than traditional fundraising methods, eliminating the need for intermediaries and reducing administrative costs.

When compared to traditional fundraising methods, crowdfunding can be much more cost-effective. For example, obtaining a bank loan or venture capital typically requires a lengthy application process and can come with high-interest rates or equity stakes. Conversely, crowdfunding can be set up quickly and easily on an online platform, with lower fees and charges than traditional fundraising methods.

The cost-effectiveness of crowdfunding provides several benefits, including:

  1. Lower fees: Crowdfunding platforms typically charge lower fees than traditional fundraising methods, making it a cost-effective option for entrepreneurs and individuals looking to raise money.
  2. Greater control: With crowdfunding, you retain control over your project or business venture, as you are not beholden to external investors or lenders.
  3. Increased transparency: Crowdfunding platforms provide transparency only sometimes found in traditional fundraising methods. Backers can see exactly how their funds are being used, and project creators can provide regular updates on the progress of their projects.

Crowdfunding is a cost-effective way to raise funds for a project or business venture. Eliminating intermediaries and reducing administrative costs provides a more efficient and democratic way to finance a project.

A stack of money


Community Building 

Community building is creating and nurturing a group of people with common interests, goals, or passions. In crowdfunding, community building involves engaging and connecting with potential backers and supporters to create a community around your project or idea.

A strong community of backers often drives successful crowdfunding campaigns passionate about the project or idea being funded. Here are some examples of successful community building through crowdfunding:

  1. Pebble Smartwatch: Pebble, a company that developed a smartwatch, raised over $10 million on Kickstarter through community building. The company engaged with potential backers through social media, forums, and email campaigns, creating a community of passionate supporters who helped spread the word about the campaign.
  2. Potato Salad: In 2014, Zack Brown launched a crowdfunding campaign on Kickstarter to fund a potato salad. The campaign went viral, and Brown raised over $55,000 from a community of backers drawn in by the idea’s absurdity.
  3. Oculus VR: Oculus VR, a virtual reality company, raised over $2 million on Kickstarter through community building. The company engaged with potential backers through forums and social media, creating a community of supporters excited about virtual reality’s future.

Community building through crowdfunding can have several benefits, including:

  1. Increased visibility: Building a community around your project can help increase its visibility and attract more backers.
  2. Long-term support: A strong community can provide long-term support for your project or business, even after the crowdfunding campaign has ended.
  3. Feedback and validation: Engaging with your community can provide valuable feedback and validation for your project, helping you improve it and make it more appealing to potential backers.
  4. Brand building: A strong community can help build your brand and reputation, making it easier to attract customers and backers in the future.

Community building is critical to a successful crowdfunding campaign. By engaging with potential backers, building a community of passionate supporters, and providing regular updates and communication, you can create a strong foundation for your project or business and increase your chances of success.


Explanation of market validation:

Market validation is essential for any new product or service a company plans to launch. It involves assessing the potential market demand and viability of the product or service by gathering feedback from potential customers, analysing market trends and competition, and testing the product in a controlled environment. Market validation aims to minimise the risk of failure by ensuring a market for the product before investing significant resources in its development and launch.

Crowdfunding has become popular for startups and entrepreneurs to validate their business ideas and products. By launching a crowdfunding campaign, entrepreneurs can gauge the market demand for their product, generate buzz, and raise funds to develop and launch the product. Some successful examples of market validation through crowdfunding include:

  1. Pebble Smartwatch: Pebble Technology Corporation launched a crowdfunding campaign on Kickstarter in 2012 to raise funds for its smartwatch. The campaign raised over $20.3m and received over 85,000 pre-orders, demonstrating the strong market demand for the product.
  2. Exploding Kittens: The creators of Exploding Kittens, a card game, launched a crowdfunding campaign on Kickstarter in 2015 to raise funds for the game’s production. The campaign raised over $8 million and received over 200,000 backers, indicating significant market interest in the product.
  3. Coolest Cooler: The Coolest Cooler is a multifunctional cooler with built-in speakers, a blender, and other features. The creators launched a crowdfunding campaign on Kickstarter in 2014 to raise funds for production. The campaign raised over $13 million, demonstrating the high market demand for the product.

Market validation through crowdfunding offers several benefits, including:

  1. Reduced risk: By validating the market demand for a product before investing significant resources in its development and launch, entrepreneurs can reduce the risk of failure and minimise financial losses.
  2. Increased exposure: Crowdfunding campaigns can generate significant buzz and exposure for a product, helping to attract potential customers and investors.
  3. Customer feedback: By launching a crowdfunding campaign, entrepreneurs can gather feedback from potential customers, helping to refine the product and make it more appealing to the target market.
  4. Access to funding: Crowdfunding campaigns can help entrepreneurs raise funds to develop and launch their products without relying on traditional funding sources such as venture capital or bank loans.

Market validation is a crucial step in the product development process. Crowdfunding can be an effective tool for entrepreneurs to gauge market demand, generate buzz, and raise funds for their products. Successful examples such as Pebble Smartwatch, Exploding Kittens, and Coolest Cooler demonstrate the potential of crowdfunding to validate market demand and launch successful products.


Flexibility and Control 

Crowdfunding is a method of raising funds for a project, product, or idea through many people contributing small amounts of money online. One of the critical advantages of crowdfunding is the flexibility and control it offers to both the project creators and the supporters.

Flexibility refers to the ability to adjust the fundraising goal, timeline, and other aspects of the project based on the feedback and response received from the backers. Crowdfunding platforms like Kickstarter, Indiegogo, and GoFundMe allow creators to change the campaign’s parameters in real time based on the feedback and response received from the backers. This flexibility helps creators to optimise their campaigns for better results.

Conversely, control refers to the ability to maintain ownership and decision-making power over the project. Unlike traditional fundraising methods such as venture capital or angel investing, crowdfunding allows creators to retain complete control over their projects, products, or ideas. Creators have complete autonomy over the direction of their projects, including the creative aspects and decision-making processes. Compared to other fundraising methods, such as venture capital, crowdfunding offers several benefits regarding flexibility and control.

Firstly, crowdfunding is a more democratic way of raising funds, allowing anyone to contribute small amounts to support a project or idea they believe in. This democratisation of fundraising empowers creators to gain support from a broad base of people passionate about their projects.

Secondly, crowdfunding allows creators to maintain ownership and control over their projects, which is impossible with traditional fundraising methods. This control allows creators to shape the project per their vision and make decisions aligning with their goals.

Lastly, crowdfunding allows creators to adjust their fundraising goals and timeline based on the response from their backers. This ability to pivot and adjust the campaign in real-time allows creators to optimise their campaigns for better results.

Crowdfunding offers creators unique flexibility and control, which is impossible with traditional fundraising methods. By democratising fundraising and allowing creators to retain ownership and control over their projects, crowdfunding has become an increasingly popular way to raise funds for projects, products, and ideas.



In conclusion, crowdfunding is an innovative and effective way to raise funds for projects, products, and ideas while providing creators with flexibility and control. Crowdfunding offers numerous advantages, including democratising fundraising, ownership, and decision-making power, and adjusting fundraising goals and timelines based on feedback.

Moreover, crowdfunding has proven to be a successful fundraising method for various projects, ranging from creative endeavours to charitable causes. Crowdfunding platforms have enabled thousands of entrepreneurs, artists, and social activists to bring their ideas to life and make a significant impact.

Therefore, if you are considering fundraising for your project, product, or idea, I encourage you to explore the benefits of crowdfunding. With its flexibility and control, crowdfunding can help you reach a broad base of supporters while retaining ownership and control over your project. So, why take advantage of this exciting opportunity and bring your vision to life with crowdfunding?