Crowdfunding can be an excellent way for startups and entrepreneurs to raise capital. However, there are a few points to be aware of. Crowdfunding does take more time and effort than other forms of funding, such as getting a small business loan, so be prepared to put in the work.
Even after putting in the sweat labor, your campaign also may not be a success. Many platforms have an “all or nothing” policy meaning that if you don’t meet your fundraising goal, you won’t get any of the money.
While it may seem appealing to not have debt as you would with a loan or traditional funding, you do have to give up ownership in your company, which cuts into your potential profits in the future. Also, don’t forget to calculate platform fees, legal costs, and other expenses to launch and complete your crowdfunding campaign.