7 Reasons Why Crowdfunding Campaigns are more than just Money

Erik Chen September 19, 2015 1
7 Reasons Why Crowdfunding Campaigns are more than just Money

Erik Chan is co-founder of RocketClub, a website where companies build a community of early supporters who earn shares in the company for helping with promotion and offering feedback. A technologist and serial-entrepreneur, Erik is a graduate of MIT, Tsinghua, and Johns Hopkins.


Raising funds is one of many reasons why every entrepreneur should consider a running a crowdfunding campaign. The journey itself promises a variety of rewards for those who put in the time and effort to make it a success. Successful project creators would agree the benefits are directly proportional to what you put into your campaign. Your blood, sweat, and tears do count, and that is the wonderful thing about crowdfunding campaigns. Anyone can make it happen.


Raising money is important. But many other less tangible benefits from a crowdfunding campaign exist. These include licensing deals, venture investments, new partnerships, and even major acquisitions. These benefits don’t appear on the onset, but successful project owners can speak to them based on their experiences. The journey begins with figuring out your messaging -getting people to understand and connect with what you do through video and words. And only until then, can you perform outreach to get your word out to backers and other potential partners.


Without much ado, below are 7 other reasons why every entrepreneur should consider a crowdfunding campaign:




Running a crowdfunding campaign will force you to improve your story and messaging. At a minimum, you will be forced to be concise and direct. And ideally, you will need to make it emotional. Producing the video and structuring your campaign description will force you to think through these things. Showing a preview of your campaign to friends, family, and strangers will help you revise your story. Many inventors and project creators who are not intuitively good at storytelling benefit from this structured process to practice and refine their pitch.



Running a crowdfunding campaign is an like having an instigator to building brand awareness for your product and company. Some potential backers may not end up backing your company but many will learn about it. Your backers will share your brand on social media. And if things go well, the press will cover it giving you additional coverage that wouldn’t normally be easy to obtain without the campaign. A crowdfunding campaign is a great channel to building visibility towards your brand and story.



Crowdfunding is low cost, low-risk way to test your product for a market. You can use it to learn of demographics who are interested in your product, gauge who they are, why they’re interested, how much they’re willing to pay and which parts of your product they like best. Your campaign page is an opportunity to test and optimize parts of your campaign page for different marketing messages for increased conversion rates. Crowdfunding campaigns help you test for the effectiveness of your copy and visual content.



Lets face it. The first version of your product is likely going to be rough around the edges. Or better yet, the crowd will propose more ellegant solutions for your product. There is no better way to solicit feedback about your product than at public forums. Blogs and magazine articles are great places to understand the public perception behind your product. Joining into the discussion at these conversations will allow you to connect with users who aren’t worried about restraining their criticism. Crowdfunding campaigns allow you to tweak your product to find out what’s most important to your backers. It allows you to make significant changes before it is ready to become mainstream.



Community building is at the heart of all crowdfunding campaigns. Building a loyal base of backers and getting them to support your every move is an invaluable asset over time. This community will live with your company post-campaign and likely onto your next campaign. They will continue to offer you support in the form of feedback, promotion, and follow you on to your next initiative. Building a stick base of customers is nearly in all regards more important than fundraising. Fundraising will keep your business aloat, but a community of users who find value being part of your community will make your business sustainable. At RocketClub we offer all our project creators a dedicated forum to help them build that community and following around their company.



Besides finding you backers who believe in your product and team, crowdfunding can help your company get to the next level via connecting you with partners, investors, experts, and others you may not previously have been able to reach. To give you an example, institutional investors are now monitoring crowdfunding campaigns for interesting projects and keeping tabs on those who are building traction. It is not uncommon for firms and experts who require a level of traction before they offer their services or expertise to join in on your success. Crowdfunding is a great way to build credibility and reach out to those you wouldn’t have considered touching base with.




Ultimately, crowdfunding is a great way to introduce your product to the world, test the market, get feedback, test working configurations, and put you in touch with unexpected partners. What it also helps you with is fail faster. It helps you figure out which part of your messaging or product is not working, so that you can either switch gears or start again. Crowdfunding allows you to test, iterate, and repeat until you hit the right nerve in the market.


Feel free to contact me. I can be reached at erik@rocketclub.co for further questions.

  • Sara Moura

    Hi, my name is Sara and I also have a crowdfunding project to raise money so that I can pay for my college education. My dad is the owner of the page and we’d really appreciate if you could help me out. Pleade check it out: http://gogetfunding.com/help-saras-university-education/ Thank you 🙂

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