Blockchain is an amazing technology which came into prominence with the introduction of Bitcoin cryptocurrency. It is a digital ledger for storing numerous data including financial transactions in a decentralized and immutable way. Implementing blockchain innovation at crowdfunding industry has brought a drastic change to various entrepreneurs who seek to raise capital for their venture. The major challenges involved in the crowdfunding platform are crushed by bringing in transparency along with the best features of blockchain application. Being an entrepreneur, you can raise fund for your business or new project easily through blockchain.
Blockchainappsdeveloper is a prominent blockchain development company specialized in integrating blockchain application for various business verticals. We render end-to-end blockchain development services to deliver custom blockchain solution for your Crowdfunding sector.
Crowdfunding has become extremely advantageous for businesses of different verticals, despite the size of the business. In crowdfunding platform, entrepreneurs can raise capital for their business from donors through internet. Though the crowdfunding system looks easy, it does involve certain challenges which you might face if you are in the crowdfunding activity. Here are some of the major problems with crowdfunding.
Trust is the biggest challenge when it comes to crowdfunding. If you are an entrepreneur with no prior brand, then you have to generate trust and brand credibility among the investors to attract interest from the potential investors. There might be some fraudulent campaign, that will get the funds and go away with the money they got.
The growth of crowdfunding has paved a way for various businesses to provide a platform for business community to raise huge capital. It is essential to choose the right platform that reaches a lot of crowd, attracts greater number of investors at a less cost. This is the next major problem after earning trust.
Another common challenge involved in the crowdfunding is that, you must set up the right kind of audience at the right time to achieve the goal at the appropriate time. It is important to have realistic target that is accepted by the investors.
Sometimes, there is a possibility for someone else stealing your business ideas, since it is a platform open to public. There is a great chance for others to take away your business ideas easily before you execute.
Building interest to the crowdfunding campaign is yet another biggest mistake or common problem. It is not possible to earn interest for your business as soon as it is launched. It is essential to build interest prior to the campaign starting.
Another major mistake that almost everyone does is that the investors will not be rewarded after getting the fund. This might lead to loss of trust among investors and creates a negative brand credibility. One must ensure that the investors are rewarded promptly with their requirements.
In traditional crowdfunding, it is limited to certain geographical location. But blockchain would certainly extend the crowdfunding project to every part of the world without limitation. This will help you to generate huge capital from potential global investors.
Integrating blockchain for crowdfunding will allow the investors to know what is done with the money invested and the fund will be utilized properly. As a result, this would enhance your investors trust and brand credibility.
With blockchain based funding platform, start ups and the investors enjoy lower transaction cost and entry fees. This is because blockchain is decentralized and involves no middleman, providing greater opportunity for crowdfunding world.
The smart contract is a self executing mechanism that automates the terms and conditions as induced. This will make the platform more secure and easy for both the funder and start-up.
ICO is a crowdfunding platform through which one can raise fund by listing token or coin. It has been a great place to list tokens for ICO sale as a lot of investors has access to the platform.
You can get the required capital for your venture through this blockchain based crowdfunding platform. This will also ensure that the investors who donated are rewarded with something like share in business, etc.