Roadmap to launch your crowdfunding platform: Business Model & features
It is said that ideas never die and every eminent business begins with a unique idea. But what if you don’t have enough resources to prosper your innovative business idea? Crowdfunding refers to the modernized way of funding a project or venture by raising small amounts of money from a large number of people, usually through the Internet. Unlike conventional finance raising methods, crowdfunding offers a forum for anyone who has an idea to pitch it to potential investors.
The overwhelming business opportunities and blooming global market recognition ignite a new age entrepreneurship pattern and thus bestow immense possibilities into the hands of today’s crowdfunding platforms. Renowned Crowdfunding platforms such as Kickstarter and Indiegogo are the perfect examples of how to propitiously implement a crowdfunding business plan as they successfully raised huge revenues from the percentage of the funds raised for other businesses. This topic reflects a complete guide to support your efforts to set up a crowdfunding platform.
Crowdfunding Business Model: How Does It Work?
There exist four pre-defined crowdfunding business models. Donation, reward, equity, and lending. Donation-based model is a perfect fit for community-based and charitable causes where reward model is a variation on donation-based funding, here the investors receive some reward – usually in the form of a product or service for which the campaigners are seeking the funding. Equity business model possesses a traditional trait as the investors typically pay a large amount of money and are given an equity position in the campaigner’s business. Whilst in lending, original amount is being repaid along with the interest.
Every crowdfunding portals incorporate two important entities. One is project owner (the one who own the idea) and the other is project backer (the one who fund the concept). Anyone with a sterling idea can list their project complying with the site’s terms and conditions. Those who are interested in this idea can contribute, where the funding amount and duration of the project are solely decided by the project owner alone.
The revenue model of a crowdfunding portal should be profound and entwined. When considering several familiar crowdfunding revenue models, one can possibly include these lines of revenue:
- Commission through successfully raised funds
- Revenue via listing
- Advertising fees ( ensuring better visibility to the campaign)
- Provide assistance (assisting in optimizing the project or campaign)
- Express listings (promote listings and improve visibility)
- Shipping services
Moreover, user experience matters the most. The way your platform interact with your potential users will ultimately define your success. The website must have an excellent layout solid enough to impose a strong impression on the user’s mind. The design should incorporate both entrepreneur’s and investor’s perspectives. Now, let us look into some fundamental facts that might help you build a compelling crowdfunding portal.
- Develop dedicated sections to showcase projects, ensure easy navigation
- Built-in methods for potential investors to ask questions to creators as well as you
- Create a specific page to recognize and reward funders and thus enhance the trust element
- Highlight project of the day to encourage more innovative concepts
- Enable project owners to talk directly with funders
However, we recommend following a Kickstarter like business model, choosing Kickstarter clone script for assured precision and viability.
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Features To Acknowledge
An exceptional crowdfunding platform is the one which satisfies the expectations of both creators and investors. It blends both the ingredients, offers them similar attention and thus delivers a comprehensive solution. Undermentioned few exemplary features to consider while developing your crowdfunding portal.
Functional User Interface For Top-grade flow process
This is the prior factor that generates an impression on your user’s minds. Moreover, it plays a vital role in their decision-making process as well. When considering crowdfunding, new ideas are the fuel that drives the business. So it is recommendable to incorporate relevant categories, and suitable form fields, moreover, allow creators to include descriptions, website, images, videos etc related to the project. In whole, produce a streamlined management system to manage, create, edit and post crowdfunding projects.
Additionally, an advanced project search, a project moderation/verification process and a crowdfunding forum would be a better idea for anyone who craves for a very appealing user interface. Find here why crowdfunding is a good business idea & future opportunities.
Even-handed Approach To Incorporate Both Creators And Investors
A successful fundraising business is all about how well you integrate the creators as well as investors. The fundamental concept is to treat both entities with equal importance by assuring similarity and thus create an impression of recognition.
- Design an investor alone area where creators can share special updates/rewards with them
- Add a specific space for entrepreneurs to showcase their successfully funded projects
- Include a ‘get to know’ feature that allows investors to communicate with project owners directly before funding any projects
- Allow users shortlist their favorite projects, report those which violated the guidelines
Solid Payment Gateways For Flauntless Transactions
Since crowdfunding is all about fundraising, a reliable payment gateway system is the most important factor to consider while setting up your crowdfunding portal. One can always choose between two known payment methods, all-or-nothing or partial models.
Kickstarter uses the all-or-nothing model. It involves gathering pledge cards rather than actual payments and is preferred by investors – the money is not funded unless the goal is met and they have better faith that the project will proceed. Whereas, the partial payment method includes collecting the money up front and giving at least a certain amount to the project. Most importantly, pick from the right online payment gateways, Wepay or Paypal.
Build A Mobile App For Improved Visibility
Launch a mobile app for both iOS and Android, that might help project owners to track their project’s progress. At the same time, investors will get real-time updates as well. Every business, whether it is an industry expert or a small one, they all incorporate mobile apps into their business strategies. This happens as they realize the potential possibilities of mobile applications in improving the visibility and brand recognition, creating a direct marketing channel, enhancing customer loyalty and so much more.
Crowdfunding today become a substantial constituent of every business as it liberates them from present-day fundraising challenges. Not only help growing other business but also generate a significant amount of revenue for themselves through strategic revenue-raising practices, hence exemplifies a great business concept.
Agriya’s remarkable Kickstarter clone is a unique blended, inventive fundraising concept, built by incorporating modern-day market demands and next-generation technologies. The full-fledged crowdfunding script is a well-sophisticated clone and thus enables you to build a customized reward-based fundraising portal with much ease and great efficiency.