Crowdfunding has proven to be a great way to fund businesses looking to get off the ground, and assist established investment firms to diversify their sources of capital. Not only does crowdfunding bring in new investors, but it also helps to spread brand awareness and stimulate discussions.
Capital raising has been a painstaking exercise associated with lots of regulatory hurdles and barriers. It has, therefore, become apparent that the traditional financing methods are simply not suitable for fast growing modern businesses.
Fortunately, starting a crowdfunding platform can help to overcome some of the many problems associated with traditional capital raises and investor management.
If you are still unsure of what crowdfunding type is right for your business, you can check our article discussing different types of crowdfunding.
Here we will discuss some of the benefits of starting your own crowdfunding platform and why this solution may be right for your business.
New Way of Generating Capital
Historically, investment firms have faced a long and challenging road to securing new sources of capital. Offline processes are often inefficient and present a number of logistical and distribution limitations.
With the advent of online crowdfunding, companies can now expand their reach more than ever and diversify their sources of capital.
New marketing opportunities mean that companies can get their message and vision in front of a broader range of new domestic and international investors.
Streamlining Compliance
One of the other advantages of owning your own crowdfunding platforms is the ability to automate time-consuming due diligence and compliance processes.
Some crowdfunding software can even provide a framework that allows users to customize the processes from initial registration to final investment. Furthermore, certain software comes with built-in or third-party integrated accreditation and compliance features.
Essential steps such as controlling the onboarding process, payment gateways, compliance reporting and KYC approvals and be customized and arranged as deemed fit. Once completed, these inputs can be managed and safely stored for audit trials and investor records.
Using Technology to Simplify Your Business Operations and Administrative Tasks
Administrative tasks related to funding can also be very time-consuming and consist of large amount of paperwork. Building on the automation of the due diligence process, administrative tasks and other similar operations can be streamlined and simplified. Crowdfunding software can be used to automate workflow and send emails during the investment cycle.
Owning your own crowdfunding platform also allows you to view detailed statistics of your investment offerings from the administrative backend of the software. Project activities, end-user information, and finances can all be tracked and used as a basis to analyze performance.
Powerful Marketing and Distribution Tools
Marketing is one of the essential components of any investment crowdfunding offering. The powerful marketing tools that come bundled with some white-label crowdfunding software is another advantage of creating your own crowdfunding platform. Rich images, videos, and text can help build your online presence and garner more attention.
What’s more, distribution tools like social media sharing and marketing emails can be built-in to help get your message in front of an audience that you may not have been able to reach otherwise.
Potential Cost Savings
The process of raising capital in itself requires some initial investment. Tasks associated with marketing, advertising, administrative functions and investor relations can be inefficient and costly.
White-label crowdfunding software bundles all these tasks together in a single software package to automate tedious, time-consuming and repetitive processes, which can significantly reduce operating costs. For example, legal costs can be drastically reduced by using built-in templates to generate legal documents for various dealings.
In addition, the tools available in white-label crowdfunding software can reduce marketing costs by eliminating the need to develop a corporate website. The cost associated with marketing materials for printing and mailing, such as paper, ink, and stationery can also be decreased significantly since crowdfunding software makes these processes entirely digital and paperless.
Technical and Professional Assistance
The world of crowdfunding can be complicated and difficult to navigate for the uninitiated. The numerous administrative and legal processes involved can prove to be very challenging without the right professional support. One of the benefits of White-label crowdfunding software is the ability to seek technical and professional assistance.
The teams are well qualified and experienced in compliance regulations and other legal processes. As an added benefit, access to technical and professional support can help reduce the high cost of hiring additional staff or outside consultants.
Conclusion
There are several advantages to starting your own crowdfunding platform, whether you decide to build from scratch or purchase a white-label solution.
However, it is crucial that you engage the right vendor and assess the benefits of your application before choosing which solution is right for you.
Katipult offers Investment Crowdfunding Solution that offers everything you need to manage the entire investment cycle, as well as solutions specifically designed for your industry.
Feel free to contact us and schedule a demo today!
