Crowdfunding: Opportunity for Women Entrepreneurs
- IWB Post
- December 8, 2014
What is the thought crossing your mind when you hear that somebody whom you have known for a long time as a housewife, wants to be an entrepreneur and start her own business? Would you trust her by giving money to start her endeavour? Sadly, in most cases the answer is no.
Venture capital funding, is mostly a male dominated domain, and it is often extremely hard for a woman to convince investors. In such scenarios crowd-funding is an option which has opened new horizons for women who want to break the shackles of conventional society and take the real world head on.
What is Crowdfunding?
Suppose, you want to start a new business but unfortunately cannot find the perfect investors, who will help you to raise the requisite capital. This is when crowdfunding websites come into play.
In these websites you create an account and mention the details of your business to the website members, inviting funds for your venture. It is then that people could decide that whether they should invest in your business or not. In return of their investment, in most cases the crowdfunders are given stakes in the company or business as shareholders. Below are the few essential steps through which you can start crowdfunding for your business:
A successful story
Once you create your profile on a crowdfunding website, you need to explain the idea behind your business as to what it is about, to whom it will cater and why should people invest in it. A good story is bound to attract crowdfunders.
In this new age of internet nothing beats a video story. For this you need to prepare a script and also figure out exactly what do you want from it. A professionally shot video with facts about your venture is a great way to convince investors.
It is always a good idea to include photos of your product, and also the link to your website in the crowdfunding proposal. In this way people feel sure about your ingenuity and also understand that what exactly your product is.
A clear plan
Don’t over exaggerate and present a clear plan with what you expect from the business and the type of returns. This helps your potential investors gain better understanding about your proposal. You can also provide information about past initiatives which were similar to what you are offering so that the investors get convinced that it is a time-tested venture. However, they are fresh and innovative ideas that always work the best. Remember that people believe in ideas.
The Websites to discover
Some of the main websites are Kickstarter, Indiegogo, Sellaband, Pledgemusic and RocketHub. Each of these websites have their own separate guidelines for submitting a proposal and they evaluate each one of them before approving and letting them be a part of their website. Though relatively new in India, it is slowly and steadily curving its niche for the Indian entrepreneurs. Some of the major international players like Indiegogo and RocketHub support Indian businesses while there has also been a rise of websites such as BitGiving and Pikaventure.
Like every other initiative, it also has its flipsides. In this the people who fund your business are rewarded by making them shareholders. But since they don’t do anything after their initial investment, you are left with many stakeholders who are not contributing in the venture both monetarily and in ideas. Another problem is that since you have to do everything yourself in crowdfunding, it can be quite difficult when it comes to PR and marketing. The last consideration is money. Apart from the fees that the websites charge, you are also left with paying for your publicity campaign and all the people who have contributed in the business. The websites often charge you a percentage of the amount raised or collected. Here, the amount raised doesn’t always mean the amount that you have received and also includes the costs that went into marketing.
Opportunity for the Woman Entrepreneur
Plum Alley is a crowdfunding website created by Deborah Jackson, and is unique in a very interesting way. Plum Alley is exclusively for women so that they don’t have to depend on male investors doubting their entrepreneurial abilities and can start their new venture through the crowdfunding. It is true that crowdfunding is still taking baby steps in India but if used in a right way this could be a great chance for the Indian women.