Crowdfunding: Turning Customers into Funders
Different Types of Funding for Your Business: A Practical Guide for Founders and SMEs — Part 3
Crowdfunding is a way to fund business growth by raising money from a large group of people through online platforms. There are three main types:
- Donation-based, where people give with no return (not usually suited to business).
- Reward-based, where backers pre-purchase a product or receive perks, making it ideal for funding new products and testing demand.
- Equity crowdfunding, where investors receive shares, and in Australia this operates under Corporations Law with limits on company size, fundraising amounts and retail investor caps.
Crowdfunding can deliver more than capital, it can build early customers, market awareness, and valuable product feedback. It suits businesses with strong customer appeal and growing interest in B2B as well as consumer products.
However, it also comes with challenges including public disclosure requirements (for equity), many small shareholders, no guarantee of success, delivery obligations, and competition from other campaigns.
Used well, crowdfunding can validate your market and fund growth, but it requires planning, promotion and the ability to deliver on your promise.
👉🎥 Watch the video to learn more
If you’re considering crowdfunding to fund your next stage of growth, let’s talk through whether it’s the right fit for your business. Contact me below.
Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably.
Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.
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Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052
