Did You Know That These 3 Situations Can Make A Crowdfunding Project Stop?

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Crowdfunding has attracted a lot of individuals, start-ups, small and medium-sized enterprises as well as big companies in their pursuit to connect to more people. The platform uses this connection to move and transfer financial support from those that are willing to help over to those that are in need of monetary help.

There are a lot of social funding campaigns that has taken off and became big and established companies in various industries. There are also a lot of success stories when it comes to reaching and surpassing target amounts in crowdfunding. However, just as there are success stories, there are also campaigns that did not even get to finish the project.

There are some who did not reach their goal, others just stopped in the middle of their campaign while some did reach their goal but ran into trouble after. There are a couple of reasons why campaigns would have a problem and stop their run. Some can be due to lack of public interest and while others are trying to regroup and relaunch the same campaign in the future.

Why some people decide to leave crowdfunding

Here are a few more of the reasons that can make project initiators stop a crowdfunding run.

  • Shortchanging project preparation. One of the quickest ways to fail in crowdfunding is to underestimate the amount of work you need to put into the campaign to make it successful. On the surface, it looks like an easy project to run but once you plunge into it, you will soon realize that it takes a lot of hard work. Even before you click that launch button, you need to put in work to make sure that the campaign is set. Investors can understand the idea, vendors are lined up, messaging is decided on and a marketing campaign is ready for implementation.

  • Mishandling relationships. There will be a lot of rapport building opportunities in crowdfunding you need to take advantage of. Missing out on them can make your campaign more challenging than it already is. On the other hand, it would be hard to develop a relationship with all your investors if you are talking about thousands of investors but the main idea is to maintain a positive and proactive relationship. Do not wait for them to start asking you for updates – you should be sending these out regularly. Surveys on general sentiment can also be a great tool to help steer your project to the right direction. The important thing is to keep an open line of communication with your stakeholders.

  • Mismanaging the finances. There is nothing that can make you stop your crowdfunding project faster than mismanaging funds. The main purpose you put up the campaign is to solicit financial support from people for a product or idea. If they like it, they put money into you project expecting that you use it in accordance with your business plan or commitment. If you decide to use that money to get a vacation, buy a car or even just go shopping then that is fraud. This is one of the quickest ways for a crowdfunding project to lose steam and can even lead to court for legal actions.

 

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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