Crowdfunding can seem like an appealing option for businesses and non-profits alike. There are many platforms to use to get your cause or idea in front of a lot of people. Some of the ideas that have been crowdfunded got double or more of what they were asking. Unfortunately, those campaigns were few and far between, although they did get a lot of press. It’s estimated that less than half of the crowdfunding campaigns get fully funded. Most campaigns only receive about 20% of their goals. Here are three problems with crowdfunding.
The most generous donors are those who believe in your cause. How often do strangers just come up to you and give you money without even spending time with you? Whether you’re looking for investors or donors, you have to pitch your organization to find the people who will support you. Crowdfunding doesn’t let you interact with people personally. They have to find you.
Going Viral Is Difficult
One of the best ways to reach people through crowdfunding is to go viral. With so much content being produced online, going viral is more difficult than ever before. Trying to go viral through crowdfunding is like trying to watch a movie on your smartphone while you’re in a theater. It’s a crowded environment where it’s going to be difficult to stand out.
Credibility Is Lacking
popSLATE 2 raised over $1 million, which was 1,371% of its goal. A year later, the company entered the legal dissolution process. No money was refunded. The campaign went unfulfilled. And they’re not the only one. Your organization may be fully trustworthy, but many organizations have tainted the waters for others. It is difficult to get people to trust you through crowdfunding.
Whitefish Funding offers financing options without the problems associated with crowdfunding. Contact us for more information.