TURNING FOLLOWERS INTO FUNDING

Guide Into Successful Crowdfunding

What the hell is crowdfunding?

Crowdfunding is the process of raising startup capital for funding a new business or product or projects, usually online, from large amounts of people. Crowdfunding allows entrepreneurs or creators the ability to pre-launch products or release the latest greatest next big thing in order to raise the proper startup capital to get your business going.

In 2015, it was estimated that worldwide over US$34 billion was raised through this lucrative funding platform. Crowdfunding has become an easier approach for raising startup capital for early stage entrepreneurs, other than your traditional ways of business backing from banks, angel investors and venture capital firms. Entrepreneurs pledge for small amounts of money, to collectively reach a monetary end goal, primarily from friends, family and followers.This practice has become more commonplace for new startups, musicians, designers, inventors or anyone ambitious enough to own and operate their own businesses. 

In its simplest terms, crowdfunding is a process of gathering a crowd of people, to listen to your campaign pitch and pay you small or large chunks of money, to invest in your  ideas or products. Pretty much, you can crowdfund for anything, as long as people believe in you and your idea. From starting your own bake shop, from setting up a music studio in your basement, to designing your own clothing line, the projects are endless. The idea is to be able to entice people with your products or projects,  to convince potential investors that you are worthy of investment. 

Why is crowdfunding necessary?

In most recent years, the success of crowdfunding has allowed entrepreneurs to raise billions of dollars collectively at an astonishing rate. Proving that this mechanism is here to catibolt new entrepreneurs forward.

With well over 543,000 entrepreneurs starting a business each month in the United States, it’s been a common misconception that the U.S. economy is dominated by huge corporations when in fact roughly 99 percent of all independent enterprises in the country employ fewer than 500 people, meaning small businesses technically dominate the market in the United States, accounting for 52 percent of all workers according to the U.S. Small Business Administration (SBA).

The SBA defines a small business as an enterprise having fewer than 500 employees. There are almost 28 million small businesses in the US and over 22 million are self employed with no additional payroll or employees (these are called nonemployers)

Does crowdfunding work for minorities? 

Traditionally, if you wanted to raise startup capital for a new business or product, you would have to deliver the world’s best business presentation. Provided by, executive summary, business strategy, marketing plans, SWOT analysis, financials (WOAH), along with a whole lot of other things you probably never even heard of. Only to be ridiculed, by taking a bended knee from some old wealthy old bitty, that probably doesn't have your best interest in mind. 

Statistically , the #1 reason why minority entrepreneurs fail before getting started, is simply the lack of funding and public support. 4 out of 100 entrepreneurs will succeed by hitting the celebrated 5 year mark (Standing Ovation-Young Jeezy), only leaving others truly unaware of how it all went wrong and constantly blaming the world for their untimely misfortune.

For example,

A Minority Business Enterprise (MBE) is an American term which is defined as a business which is at least 51% owned, operated and controlled on a daily basis by one or more (in combination) American citizens of the following ethnic minority and/or gender (e.g. woman-owned) and/or military veteran classifications (hope you got all that):

• African American (Blacks, Brothas, Sistas etc)
• Asian American (includes West Asian Americans (India, etc.) and East Asian
• Americans (Japan, Korea, etc.)
• Hispanic American - Persons with origins from Latin America, South America, Portugal and Spain.
•  Native American
• Arab Americans  - (Shhh… we snuck this one in the country) 

Kickstarter is the number one source of crowdfunding platforms for gathering money from the public for businesses, which circumvents traditional avenues of investment. Project creators choose a deadline and a minimum funding goal. If the goal is not met by the deadline, no funds are collected, with a success rate of 35%. The total amount pledged was over $3,103,718,656 in 2020, most successfully funded projects raising less than $10,000. with a ethnic diversity ratio being less than 2% of Black/African Americans - 4% Hispanic or Latino and 1% of other minority groups. (Kickstarter). 

Studies have shown since 2006, African-Americans are 79% more likely to own and operate their own businesses than non-minorities entrepreneurs. There are well over 1.9 million black owned businesses in the United States today (2022), with an annually income that contributes $136 billion and 910,000 jobs to the US economy. (MBDA)

How do I turn followers into funding?

In the United States 86% of 18 to 29 year olds use social media. Currently, there are over 184 social networking sites with at least 25,000 registered users. The largest network Facebook, which focuses on high school and college students, has over 500 million registered users with an average of 130 friends; over 100 million users access their account from their mobile devices. These users spend over 500 billion minutes a month on Facebook. 

What if this doesn't work?

Crowdfunding sites are in a powerful position to illustrate how business is growing & changing at a rapid pace. Any entrepreneur that feels stagnant in their current position will not create a successful marketing/crowdfunding campaign (people can sense negative energy). When starting a new business venture, you should feel that the time, money and energy spent developing your craft, will initially turn your products and projects into profit. And that should be something to smile about. 

My father once told me a story about a guy that designed the first car battery, Alessandro Volta. Alessandro had an idea of having over 180 failed attempts, when he finally succeeded, they asked him what have you learned from your experience, he said “I've learned 180 ways how not to make it work”.. meaning never stop trying.