Crowdfunding is a form of financing a business through the collective effort of friends, family, customers, and individual investors. Several web based platforms provide an easy way for an entrepreneur reach a wide audience with their product and essentially presell their product.


The traditional model to get financing for a business is you develop a business plan, develop a product and have a marketing plan, then go to a conventional lender and ask for money. With the rise of crowdfunding, you can get your product ready to manufacture and market it on a crowdfunding platform. Just as with preselling, the entrepreneur has the opportunity to see if the market wants to purchase and gives some indication to the demand for production. Knowing in advance how much to produce makes inventory management much easier to handle.


Despite how easy it may look, crowdfunding is not simple to achieve success. There is a lot of time that goes into the message and video, but this work will prove invaluable to marketing after the crowdfunding has finished.