An Investigation into Crowdfunding for Startups

An Investigation into Crowdfunding for Startups

Simon Jenner - Million Labs

Simon Jenner

Thursday, 21 January 2021

An Investigation into Crowdfunding for Startups

Understanding Crowding For Building MVP

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Have you ever considered crowdfunding for building your startup's MVP? If not, you might be missing out on a brilliant opportunity.
As the internet has grown in popularity, so has crowdfunding. Just the UK alone has a funding volume of £7.6 billion, making it one of the most well-established crowdfunding markets in the world. With crowdfunding, the possibilities are endless.
Let’s deep dive into the opportunities crowdfunding can offer your no-code startup.

Crowdfunding Defined
Crowdfunding is an alternative finance method for projects, businesses, and loans compiled through small contributions from many sources. Individuals who crowdfund your startup can make their contributions through a number of ways, including directly or through low touch online platforms.
Of course, crowdfunders will expect a return on their investment in some form or another. Often, this return will be through early access to new products and services. 

Crowdfunding’s Benefits for Startups
We don’t have to tell you that startups do not come cheap. The early stages of establishing a startup often require a noteworthy amount of time and finances - yes, even if you opt for no-code development (although this will save you a significant amount of resources). Often, funding from investors or bank loans can be quite rigid in their terms.
This is where crowdfunding shines. With crowdfunding, you will be able to maintain full control of your startup without selling off shares, concern over your credit score being high enough, or in some cases, even having to pay the money you receive back. Oftentimes crowdfunders do not expect return in the form of money but instead through rewards, equity, or interest. To further entice these crowdfunders, there are government schemes in place to ensure they can earn tax breaks based on their investments.
As a founder, this opportunity allows you to focus your energy toward your true passions, such as building your startup's MVP and creating the strongest business model possible, without the lingering stress of making enough revenue to pay your investors back.

Crowdfunding Options
Not all crowdfunding options are created equally. Here is a brief insight into the different types of crowdfunding to help you select the best approach for your startup.
Donation-Based Crowdfunding: This form of crowdfunding involves crowdfunders donating without expecting anything in return, apart from the satisfaction or excitement they get from supporting a good cause. However, this type of crowdfunding is most successful among non-profit businesses and community projects.
Equity-Based Crowdfunding: By participating in equity-based crowdfunding, individuals will invest with the return being equity, or rather, shares in the startup. With no-code startups continuing to excel in the marketplace, this form of crowdfunding could be the most successful for your startup and profitable for your investors.
Peer to Peer Lending-Based Crowdfunding: Not every startup founder is interested in selling shares to their company. If this is you, you might consider lending-based crowdfunding. This option allows crowdfunders to lend their contribution with the expectation that it will be paid back with interest. 
Reward-Based Crowdfunding: Reward-based is the most popular and accessible form of crowdfunding. Funders will commit small amounts of money, usually between $5 and $100, to receive rewards in the form of special access to the company, such as swag and early access to products.

Crowdfunding is an incredible tool for your no-code startup. By accessing investment without tying yourself to a rigid financial institution, you have the opportunity to focus on what really matters to you: establishing the success of your startup.
You don’t have to achieve this success on your own, either. Through the MLabs No-Code Bootcamp, we will help you build an MVP for your startup, learn no-code, and save financial resources and time simultaneously. Claim your spot to get set on the path to a viable startup.

Launch Your Startup Fast and Affordably! Our no-code approach is perfect for non-tech founders. With a simple 3-step process: START, LAUNCH, GROW, join over 1400 startups we've successfully launched. Start your journey today!