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Small businesses and entrepreneurs now have a great opportunity to utilize their social networks and gain followers to expand their businesses or create new projects. A new phenomenon called “Crowd funding” has allowed many businesses and entrepreneurs to start amazing business ventures without having to get financing through traditional routes. Crowd funding is essentially a collective effort from people who pool their resources through the Internet to fund a project or idea from another organization that they believe in.
There are already a few sites that have been successful in linking entrepreneurs and dedicated followers to raise money for some start-ups that look very profitable. Websites like artistshare, indiegogo, kickstarter and peoplefund.it have been very successful in helping entrepreneurs get the most innovative projects on the market to date. For example, the OUYA is an open source gaming console that raised over $8,000,000 or 904% of what they originally wanted to raise. Another example is The Pebble, which is a smart watch that is optimized for the android OS and IOS and can control your smart phone via Bluetooth technology. It is currently the most successful crowd-funded project with over $10,000,000 raised backed by 70,000 people. They raised 10,000% from what they originally wanted.
The first recorded event from crowd funding was with the British rock band “Marillion”, whose fans took it upon each other to raise money for Marillion’s tour around the United States in 1997. The band or management had nothing to do with this crow-fund, but they benefited from it.
So there is a lot of potential for small businesses and entrepreneurs to use their friends and followers to spread the word about the project or idea they would have. Now the question is how do you get your friends and followers to rally behind a project or idea. There are some methods that entrepreneurs and small businesses will have to learn to do, using social media and social business tools. There will be a detailed analysis in BLOG 2. But once the business/start-up has an established following, you will need to do the following to have a successful crowd-fundraiser: