How to Raise Money for Your Bitcoin Project by Crowdfunding
How to Raise Money for Your Bitcoin Project by Crowdfunding
Bitcoin has had a tremendous impact on the world of business, such as borderless transactions, lowers transfer fees, and real-time transactions. Despite all these benefits, it's difficult to get your bitcoin project off the ground. Not everyone is sold on the bitcoin philosophy yet. No matter how good your idea may be, you’ll need to convince investors or sponsors about your bitcoin venture to raise money to launch your company and hire employees. In this post, we’ll explain how you can raise money for your projects by crowdfunding.
What is Crowdfunding?
Crowdfunding is the practice of funding a project by raising money from many people, hence the words crowd and funding. In exchange for their donations, backers get rewards as equity, products or services. The concept has been around forever and has been used to fund everything from political campaigns to new inventions and now tech products such as bitcoin projects.
How does Crowdfunding work?
Crowdfunding can be a very effective way to raise money for your project. However, this type of funding can only fund the start-up and expansion of your company. It’s not a loan, so you don’t repay it with interest. People who invest in your company through crowdfunding will expect a return on their investment, so your product or service should be profitable. These returns on investments come as perks or conditions set by the donors. Crowdfunding can help you spread the word about your project and build a community of people who believe in it. These people can become customers, brand ambassadors, or even employees.
How to Start a Bitcoin Crowdfunding Campaign
If you decide to start a crowdfunding campaign, there are several steps you should consider. Start with research, then plan, present, and market your project through social media campaigns.
Draft a plan
Start by drafting a plan for how you will build your product and how the funds you raise will be used. Investors are more likely to support your project if you have a coherent plan.
Hype it up!
Create hype around your project by making a video and writing an appealing whitepaper. You can also try to get an endorsement from an industry leader.
Social media campaigns
Share your campaign on social media and reach out to people in your network. The more people who know about your campaign, the more likely you are to receive funding.
Focus on the project, not the cash
Don’t focus on the amount you’re trying to raise. Instead, focus on the project you’re trying to fund and the benefits it brings.
A project for people
If you can build a project that people actually need, then you are likely to receive more crowdfunding. Design sprints and research are a great way to find market gaps and build for people.
3 Best Mainstream Platforms for Crowdfunding
There are many crowdfunding platforms available, each focusing more on a particular sphere. These are some of the mainstream and very popular crowdfunding platforms I’m familiar with. They are not bitcoin specific, so they may garner your project more exposure. Keep in mind that things change, and you should always check their policies on funding bitcoin projects. Also, crowdfunding platforms charge fees for transactions, i.e. a percentage from funding that you receive.
Indiegogo is the most popular overall tech crowdfunding platform out there. It’s open to entrepreneurs and companies around the world, and it’s free to use.
Microventures is an equity crowdfunding platform for small businesses in their early stages of development. They focus on finding and investing in undervalued companies.
SeedInvest is a crowdfunding site which connects investors to startups. Here your startup will get noticed by multiple VCs and angel investors.
3 Platforms for Bitcoin Specific Crowdfunding
Here are 3 of my favourite bitcoin specific crowdfunding platforms. These platforms allow for donations in bitcoin. Unlike the mainstream crowdfunders above, these are more up-and-coming. Therefore, you probably won’t get as large an exposure as you would with the mainstream platforms, and you would have to do more marketing yourself, but they give advantages of their own. These crowdfunders are usually free, they are niche, meaning that you’ll have less competition, and by using them you are doing a good thing by helping to develop the bitcoin space.
Geyser is a popular bitcoin specific crowdfunding platform. A major advantage of this platform over the traditional ones is that you get funding right away. It is also a lighting-native platform.
Tallycoin is another great bitcoin specific crowdfunding platform. Here you get 0 fees, they work with both lighting and bitcoin, and it’s a platform built on blockchain.
OpenSats is a great crowdfunding platform that focuses on helping open-source projects. Through OpenSats, any money that is donated goes directly to the creator without fees or third party meddling.
Conclusion
If you have a good idea but lack the funds to get it off the ground, crowdfunding is a great option. However, it’s important to have a coherent plan to present in place beforehand, and to communicate it effectively to potential sponsors. Worry not. If your campaign fails, you’ll learn what you need to do in order to succeed in the future. But with a successful campaign, you’ll have the funding you need to start your business or get your project off the ground.