The steps and strategy for startup companies to follow to raise funds for the new business. The full article is available at https://www.evus.com/blog/successful-crowdfunding-tips/

1. Wouldn’t it be nice to fund your startup, gain new customers,
market your product and gain valuable customer feedback all
at the same time?
THE ULTIMATE GUIDE TO CROWDFUNDING YOUR STARTUP

2. Contents
Ultimate Guide to Crowdfunding2
Part 1
Part 2
Part 3
Part 4
Part 5
Part 6
Part 7
Types of Crowdfunding
Necessities for a campaign
How to Get the Word out
Entice with Rewards
Disadvantages to Crowdfunding
Why Choose Crowdfunding for your Startup?
What is Crowdfunding?

3. 3
Ultimate Guide to Crowdfunding
What is Crowdfunding?
Just so we are all on the same page regarding the concept, crowdfunding can
be defined as a fundraising method that involves small contributions from a
large number of people (the “crowd”), often in exchange for some kind of
reward such as early access to a product or service, entry to an event, or
simply being publicly named as a contributor.
Essentially, crowdfunding is getting others to give you a relatively small amount of money per
person in order to finance your project, whatever it may be. Although crowdfunding or donations from
supporters is hardly a new way of raising money, the growth of online services or registries that allow
businesses or individuals to promote their companies and causes and easily collect funds is relatively
new, giving rise to crowdfunding as a new means of alternative finance for entrepreneurs.
Okay, so now that we know what crowdfunding
is, here’s how you can use it to kick off funding
for your business when you are in the early
stages of raising money. For budding
entrepreneurs in the pre-seed or seed stages,
funds can come from a number of sources
before venture capitalists, angel investors and
their like take notice. Usually this money
comes from their own savings or resources,
and/or that of friends and family.
However, it is becoming increasingly common to take to the internet and get small contributions from a
vast number of people, many if not all of whom the investors don’t know In real life. These people are
just into the idea for their business and most likely will gain something from being an early adopter,
whether that is beta access to a service, a discount on initial products or some other kind of freebie.
Chapter 1
How to Use Crowdfunding
to Raise Money

4. 4
Ultimate Guide to Crowdfunding
The four, core crowdfunding types are debt-based, equity-based,
rewards-based or donations-based.
Debt-based Crowdfunding can also be referred to as peer-to-
peer or P2P lending. This type of crowdfunding uses microloans
which eventually paid back once the company is on its financial
feet, allowing a larger quantity of individuals to become angel
investors of sorts and back ideas they think will gain traction. Debt-
based has become well-known through companies like Lending
Club and Propser.com.
Equity-based Crowdfunding allows for a large group of
individuals to get a bit of equity in a startup, usually in the form of
stock in the company. This has recently become a more viable
option for founders, especially since the second iteration of the
JOBS Act has been activated, democratizing the access to and
process of building capital this way as well as making the legalities
of equity-based crowdfunding much clearer and easier to navigate.
Rewards-based Crowdfunding is what people usually
think of in regard to crowdfunding, since it has
become popularized through sites like Kickstarter,
IndieGoGo and GoFundMe. With this sort of
crowdfunding, people invest a given sum of money
via an online platform in exchange for some kind of
reward, whether that is a freebie of some kind, early
access to a service or event, or even just the
knowledge and credit for contributing to the arts or
another good cause.
Donations-based Crowdfunding simply means
individuals donate a sum of money towards a
business or organization that they believe in. Usually
referred to as charitable donations, this form of
crowdfunding probably doesn’t apply to you unless
your startup is a nonprofit.
Chapter 2
Types of Crowdfunding

5. 5
Ultimate Guide to Crowdfunding
Crowdfunding isn’t the Only Answer
While crowdfunding can certainly play a positive role in the
creation and development of your startup, especially in the early stages,
it isn’t the be-all and end-all of building your business’s capital. In fact, it
may be ideally suited as a way to kickstart your idea and get some
momentum going, assess the market, and get some early traction before
you start working with larger investors.
It can also be a way to introduce a new product or aspect
of your services, or serve as more of a promotional method than
a true source of capital. Advertising your business’s
crowdsourcing campaign is one reason to get the word out, and
may have a more compelling hook than traditional marketing
spiels.
People love to get in on the ground, to be
early adopters orinsiders, or otherwise feel
like they are the first ones to participate in a
particular deal or become part of a secret club
– and depending on how you structure and
promote your crowdfunding campaign, you
can play on those natural urges and develop
a core group or network of initial fans who
may become your best marketing asset, as
well as a focus group who can help you refine
and properly position your startup.
5
Crowdfunding Doesn’t Have to be Only
about the Money

6. 6
So you think crowdfunding might be the way to go? There are some things that you’ll need to
have, most notably a solid, well-thought-out concept, and marketing materials that communicate that
message to the public at large. Usually a high quality video and or a similarly compelling website that
tells your story (hint: being able to articulately tell your story is the most important part) will do the trick.
You’ll also need to be well aware of your company’s current valuation, have documentation of
prior funding and use funds (for equity-based crowdfunding approaches, at least) have a marketing
plan that includes email, social media and other digital tactics (even if your product is not primarily
internet-based) and a rewards or payback plan that’s both realistic and compelling.
Getting all your crowdfunding ducks in the proverbial row might be something that you’ll need a
marketing agency or similar partner to help with, so it is important to get the right people or groups on
board early in your fundraising process.
Ultimate Guide to Crowdfunding
Chapter 3
Necessities for a Campaign

7. 7
Ultimate Guide to Crowdfunding
So how do you get in touch with or make people aware of your fledgling company
in order to riase funds from the general public or the internet at large (a.k.a. the crowd)?
The standard methods of digital promotion can work, e.g. social media ads,
promotions from key influencers in your vertical or industry, email campaigns, and other
best practices for online marketing. These don’t have to be tangible items either – you
could offer a whitepaper or an eBook download like this, software add-ons, additional app
features, or other digital bonuses. Discounts on related services (you could work with a
partner for this) also work well.
One of the most obvious ways to crowd fund is to take advantage of or leverage your existing
audience of followers and subscribers, because they’ve already opted in to receiving communications from
you and therefore have shown interest in your startup – so they are that much more likely to invest a small
amount with you, and spread the word to their own networks.
It’s also useful to offer long term deals or values for early investors, such as the opportunity to buy a
subscription or get access to services for a much lower cost if they get involved early. This may work best if
you have an established reputation or user base who see the opportunity to save on desirable offerings in
the long run.
In a similar vein, offering beta access (early entry) to anyone who invests early can also work, especially
because members of the various crowdfunding platforms and communities tend to be early adopters.
Chapter 4
How to Get the Word Out

8. 8Ultimate Guide to Crowdfunding
Creative Ways to Incentivize the Crowd
Successful crowdfunding starts by increasing and
showcasing the perceived value of your products or services.
If you’re a startup, chances are you don’t have tangible items
to ship yet, but you do have your ideas, your reputation, and
your passion for your business.
Getting these messages across to the general public and
getting them to give you even a seemingly minor amount of
cash is easier said than done. The standard freebie or
discount might be the best way to play it, or perhaps early
access to a private beta or similar new application. Tickets to
a private event or launch party can also work to curry the favor
of prospective crowdfunding investors
While Crowdfunding might seem like
an awesome way to go, if you’re a
founderorconsidering starting a
company since it is relatively low risk
forinvestors and could yield a high
reward foryou and therefore them as
well, you do have to do something in
orderto get people to give you money.
Chapter 5
Entice with Reward

9. 9
Ultimate Guide to Crowdfunding
Sample Reward
Programs
Downsides of Crowdfunding
Chapter 6
Publicly crowdfunding your company via online or social media platforms, especially common ones like
the aforementioned Kickstarter, GoFundMe, or IndieGoGo, can result in your brand being perceived as less
credible or less legitimate in the eyes of venture capitalists. After all, if your concept is so great, why do you
need to ask the internet at large for money?
Choosing to crowdfund may also be perceived as a lack of professionalism by VC’s and larger
investors, since for better or for worse, it is viewed as being somewhat less reputable than more traditional
routes. This is perhaps due to its unproven track record, however, and don’t let that be a deterrent if you think
crowdfunding is the way to go for your startup. Remember that there is always someone out there who has to
be the first mover or change the game – so why not you?
Finally, there are also the risks to your intellectual property if you choose to crowdfund, since you
almost always have to share plenty of information and details about your business, products, and plan in order
to catch the eye (and open up the wallets) of potential investors.

10. 10
Well, there is the obvious reason that founders choose to crowdfund – they need capital and it
can be a quick way to raise some cash. A huge benefit to crowdfunding over traditional channels, and
the reason rewards-based platforms are so popular, is the ability to receive funding foryourstartup
without giving up equity in your company or taken on debt. This is what sets rewards-based
crowdfunding apart from the rest.
Setting up a Kickstarter or GoFundMe account is relatively simple and streamlined, especially
compared to pitching an investor or VC. It shortens the flow of money. Instead of banks,
corporations and wealthy individuals holding all the cards, it allows business owners to build their own
platform and go right to the end user or directly to investors (as the case may be) and state their case
on a more individual basis.
That said, there are otherreasons than cash flow to use crowdfunding as a source of income or
funds foran early stage business.
Ultimate Guide to
Crowdfunding
Chapter 7
Why Entrepreneurs Choose Crowdfunding
Bonus Benefits of Crowdfunding
Not only does crowdfunding help raise the necessary
capital while offering a relatively low risk for investors (and
depending o the structure of the crowdfunding initiatives, the
entrepreneurs themselves) it offers you an immediate form of
feedback as well as a way to estimate the amount of interest
in your products or services.
After all, if people who don’t know you personally are
willing to invest in your idea with minimal pitching (as
compared to working with a venture capital firm) it probably
doesn’t suck. This will help you validate your concept, make
sure you’ve positioned yourself in the market in an optimal way
and build value for future larger investors like venture capital
firms and other third party sources of funds.

11. 11Ultimate Guide to Crowdfunding
While Crowdfunding might seem like
an awesome way to go, if you’re a
founder or considering starting a
company since it is relatively low risk
for investors and could yield a high
reward for you and therefore them as
well, you do have to do something in
order to get people to give you money.
Bonus Benefits
At the End of the Day
Showing crowdfunding interest can be a more passive
way to gain credibility, since this many people and these types
of individuals invested in your company, so therefore you must
know what you are doing.
Also, depending on how your crowdfunding campaign is
structured, you can develop near instantaneous social proof
due to the visibility of the number of investors and amount of
funds raised on the internet and social media.
Crowdfunding can be an awesomely efficient way of
validating yourstartup concept.
The reaction of the crowd to your crowdfunding
endeavors can be a powerful indicator of future success. In
addition, user comments and criticism can serve as a focus
group, offering you ways to refine your company, suggestions
for changes or new products, or pointing out necessary re-
alignments or pivots that could lead to more growth and
security.
There are plenty of ways to fund
and build a business – it’s a
matter of what is right for your
startup which depends on the
current economic climate
(especially for your target
audience) the timing of your
launch and funding needs, and the
type of product or services you are
offering. That said, considering
the various types of crowdfunding
and the range of possibilities they
offer – you owe it to yourself, your
company and your potential
clientele to explore the idea!

12. 12
The End
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