Motivation of project owners


Besides raising money, crowdfunding allows the project owner to gain feedback on some of the most critical
parts of the product before its release into the public marketplace.

For example, the project owner is able to gauge pricing information, demand for the product, feedback
on how design might be improved, demographic on potential buyers, precise information about market
demands, and direct customer interaction. It can also lead to word-of-mouth recommendation and other
social marketing.

For the project owner, crowdfunding establishes a direct link between himself and the customer. This link is
the first step towards marketing, customer loyalty, participation, and emotional attachment to the product.
Crowdfunding is an incredibly effective way of gauging if their product or idea has a mass appeal. Even
more important is the time in which the project owner is able to make this assessment; a two-month long
crowdfunding campaign is a relatively fast turnaround for getting an idea off the ground.

For project owners who experienced a successful crowdfunding campaign for their first round of financing,
the aforementioned benefits can be extremely useful for a second round of financing. Some project owners
may utilise crowdfunding again, where others may resort to more traditional forms of investment, like
venture capital or business angel investing.

When project owners combine different approaches they can fund the whole life-cycle of a project,
product, services or other business innovation.

Either way, being able to call upon pre-sales information, number of funders, amount of money raised in a
specific time period is valuable for project owners seeking a second round of financing.


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