Crowdfunding has steadily been gaining attention throughout the last decade and has become one of the most popular ways to gain funding for small businesses. Platforms such as ATB BoostR and Kickstarter are two crowdfunding platforms that are proof of the popularity of this form of funding, as well as the great success that can be found through these programs.
But what is crowdfunding?
Crowdfunding is a means for businesses to procure financial aid by appealing to the crowd – the customer, donors, etc. – to fund their campaign. It is an interesting way to fund a business or product for many different reasons. Firstly, it provides knowledge of the market and customer before a launch. It is fast and effective, and it results in marketing and exposure for the company. It also provides validation (or disapproval) of the product before it hits the market.
One huge benefit of small businesses using crowdfunding is that it allows business ideas to essentially be tested by the customers before they come out – businesses that successfully capture their customer’s attention will in turn be funded and reach their goals. Those that unfortunately do not fit the needs of the marketplace are more unlikely to be funded. This aspect of crowdfunding provides an important opportunity for businesses to understand if their product is compatible with the marketplace, and if it has a chance of being successful.
Kickstarter is an example of a global crowdfunding platform that allows entrepreneurs to create a campaign profile for their creative product or service in the hopes that it will be backed by funders. Kickstarter’s website states that they created the platform to fund projects in the following categories: “Art, Comics, Crafts, Dance, Design, Fashion, Film & Video, Food, Games, Journalism, Music, Photography, Publishing, Technology, and Theater.”
Since launching in 2009, Kickstarter has had 145,089 successfully funded projects. Through spreading the word about Kickstarter campaigns and marketing on social media, entrepreneurs and creatives are able to gain the funding they need to bring their creative projects to life.
Closer to home, ATB BoostR is a crowdfunding platform for small businesses in Alberta exclusively. Unlike Kickstarter, ATB BoostR is rewards-based, meaning that those who decide to fund a campaign – the “boosters” – essentially purchase a reward from the company that they will receive in return for their funding. The rewards are unique to each campaign, giving a taste to each donor of what the product or service they are boosting is all about. Having the rewards feature provides incentive for people to boost campaigns, and once again can increase exposure as the businesses are providing the rewards themselves to be distributed to their donors.
Not only does ATB BoostR provide a platform for businesses to receive crowdfunding, but coaching and guidance from advisors and entrepreneurs is made available along the way as well. Monthly crowdfunding workshops in Calgary and Edmonton are also made available to entrepreneurs. ATB BoostR helps hone in the skills necessary to successfully present a business and sell product through their pitch events and in their aforementioned workshops.
ATB BoostR has two requirements for businesses hoping to launch – and ideally be successful – on their platform: the belief in the importance of marketing and established efforts in it, and the intention and ability to deliver captivating rewards for customers who boost the campaign.
Using sponsored platforms such as ATB BoostR allow those businesses to receive exposure that can help drive up their popularity, and therefore their profit and customer base.
In order to further understand how ATB BoostR works, and how it can successfully help small businesses we talked to two boosted companies, The Burrows and Local Laundry.
Click on their profiles below to learn more about their experiences with the program and how their companies have grown since their campaigns.
With the undeniable success of The Burrows’ and Local Laundry’s ATB BoostR campaigns, there is no doubt why crowdfunding has grown in popularity as a means of funding small businesses. The benefits reaped from receiving funding directly from the consumers themselves, provides crucial feedback about the future success and compatibility of a product and service, that is distinct to the crowdfunding platform.