Crowdfunding is a financing system, relatively recent in Spain, which has made it possible to move forward with projects that in many cases would not have been financed through traditional channels. Crowdfunding or participatory financing (micropatronage) is its Spanish translation, that is, a multitude of small investments thanks to which a company, an entrepreneur or anyone with an idea receives funds for their project.

It is an “alternative” form of financing and exchange that has made possible, thanks to the Internet, the union between those who are looking for money to make their project a reality with people who want to invest, lend, buy or donate. If you are an entrepreneur and you are looking for funding, in this article we present some advantages of crowdfunding over conventional channels.

1. Crowdfunding can work as a market test, since, by launching the project, you can test a product and see its potential market. This is a very important advantage for those entrepreneurs who are developing prototypes or for those who want to know if there will be people interested in the product or idea they are working on. All in all, it allows to reduce the investment risk.
2. In addition, it provides financing methods adapted to a wide variety of projects and ventures. The entrepreneurs (promoters) themselves choose the financing objective they want to reach and the strategies to reach it and develop their project, with no financing limitations in this regard.
3. It is a powerful marketing tool. It exploits the advantages of social networks, pre-sales, market and product research, word of mouth to reach a growing number of potential funders in a short time.
4. And it is also an attractive formula for investors. It goes beyond profitability or profit and even the acquisition of a product. Crowdfunding creates a sentimental or emotional bond with the project with which you want to participate, which establishes a channel of identification that today has more value than other business parameters.
5. Crowdfunding fosters a different relationship between promoters and funders. In many cases, funders do not limit themselves to providing capital, but become more proactively involved in the project, contributing ideas and experiences that improve its quality and attractiveness. They become disseminators and communicators of the project and, of course, consumers of it.

For all these reasons, crowdfunding is an ideal financing method for those entrepreneurs who have an idea, but are not yet attractive enough for large investors. If you want to know more about this new formula, do not hesitate to contact us.