Crowdfunding Primer for Social Enterprises

Crowdfunding.

Crowdfunding is one way of raising funds from the public or friends, family, customers, and individual investors. This approach helps in getting large number of individual investor through Social media and Crowdfunding platforms and leverages their networks for greater reach and exposure.

Crowdfunding is essentially the opposite of the mainstream approach to business finance. Traditionally, if you want to raise capital to start a business or launch a new product, you would need to pack up your business plan, market research, and prototypes, and then shop your idea around to a limited pool or wealthy individuals or institutions. These funding sources included banks, angel investors, and venture capital firms, really limiting your options to a few key players.

Crowdfunding platform helps the entrepreneur to showcase and present the innovative idea. With crowdfunding, you get the funds from one who is interested in your project which gives them more ways to help grow your business.

Types of Crowdfunding

Funding Your Social Enterprise

Funding an enterprise is one of the key priorities for every founder. Irrespective of the type of the enterprise – for profit, not-for-profit, NGO, Society, etc., or stage of the enterprise – starting up, growing, scaling etc…, funding remains the key priority and challenge.

Most of the time, beyond the ability to convince others to invest in the venture, getting to know the modalities – What, Why, When, Where, Who and How of Fund raising is the biggest hurdle to cross. Also, given the dilemma of running the business v/s making it run, many founders quote lack of bandwidth, lack of access to capital or lack of access to market as the reasons for lack of funds. But, fund raising if done in a systematic fashion can be just a routine affair of running an enterprise.

Unitus Capital is one such enterprise that works closely with Social Enterprises and Impact Investors to make Fund Raising a systematic game plan of running the business. We had the privilege of having Abhijit Ray walk us through the puzzle of fundraising for Social Enterprises… Please take a look and design your own method. If you need any help in the process, do write to us.