The Need For Crowdfunding Documentation

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There are some people who view crowdfunding as a similar platform as other social networking sites like Facebook and Instagram. These sites serve an entirely different purpose as social funding but there is no denying that there are similarities. Just like social sites, crowdfunding relies on the quantity of people to reach a specific goal. Social funding is also technology-reliant and that the core business operations of most, if not all platforms are executed online.

That being said, social networking sites are usually casual in nature and meant to just keep tabs of your friends. There are people that are starting to use them for business as they set up online shops using social sites. But overall, it is more laid back compared to social funding and meant to just catch up with friends.

Crowdfunding is able to tap into the collective support of a large group of people in order to fund specific projects and campaigns. It can be either be as simple as donating money without asking for anything in return, investing and expecting a small reward or token for it or even getting a share of the business. But as you can see, it is more professional that social networking sites and this is where documentation is needed.

The need for documentation in crowdfunding

When you are running a crowdfunding project, you will find the need to document almost every step you make. Here are a few reasons why you need to do it.

  • It helps to guide you as you move forward. When you are starting to put the campaign together, you need to list down and document a lot of things. You can start from your target in mind, your priorities you need to keep in mind and even the names and contact information of all the people you need to get in touch with to get your initial project request out. You need to document and list down all these things and more because it can help to guide you as you move forward with the campaign.
  • It maintains a professional working environment. When you start working with your team, you need to document all agreements regardless if they are your close friends or family member. This can start with their key results area so everyone is guided on what is expected of them. It can also be any salary or stipend they are to get in exchange for the work they are doing for the project, This also works for any donation or investment that you get from other people so you have a paper trail of the money you can backtrack in the future when the need arises.
  • It helps with your follow up correspondence. When potential investors promise to send their support at a later time, it is best to get it in writing so you have a take off point when following up their commitment. If they do not send anything in writing, you can go ahead and initiate that by confirming their intent to help and put in the details. This way, you help to remind them of their pledge because they might have other priorities in life and might have overlooked that particular financial commitment.

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This article is written by the Crowdfunders Editorial Team. In Asia, Crowdfunders.Asia is a leading portal on providing news related to crowdfunding, start-up, property and business. It is operated by CoAssets.com. CoAssets is South East Asia’s first listed and largest real estate crowdfunding platform. If you have any Crowdfunding news or stories to share, please email [email protected]

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