{"id":9308,"date":"2024-11-22T10:54:43","date_gmt":"2024-11-22T10:54:43","guid":{"rendered":"https:\/\/www.turbocrowd.it\/?p=9308"},"modified":"2024-12-02T08:48:19","modified_gmt":"2024-12-02T08:48:19","slug":"right-time-to-do-crowdfunding","status":"publish","type":"post","link":"https:\/\/www.turbocrowd.it\/en\/right-time-to-do-crowdfunding\/","title":{"rendered":"When is the right time to do crowdfunding?"},"content":{"rendered":"
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\n\t\t\t\t\t\t\tTable Of Contents\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t
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  1. When to avoid crowdfunding: Pre-seed startups
  2. Testing and early capital research: Seed startups
  3. When to do crowdfunding: early stage and Growth startups<\/a>
  4. The benefits of crowdfunding at the right time<\/a>
  5. The right time for crowdfunding is not enough<\/a>
  6. Want to learn more directly with our crowdfunding experts about the topic you are reading about?<\/a>
  7. Do you need support in preparing a successful crowdfunding campaign and seeking potential investors for your project?<\/a><\/ol>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\n\n\n

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    Doing crowdfunding is a multifaceted and potentially beneficial opportunity for a business, but in order to really take advantage of it, it is necessary to understand when is the right time to do crowdfunding<\/strong>. In the life of a company, as well as in the personal life of any individual, there are many actions and activities that are in themselves profitable and correct, but if they are carried out at the wrong time, they turn out to be useless or even harmful.<\/p>\n\n\n\n

    Crowdfunding is one of them: it is a powerful tool for raising capital and validating a project, but its success and beneficial effects depend heavily on when it is initiated. We addressed this topic marginally in the article on who can do crowdfunding<\/a>, in which we emphasized how equity crowdfunding is not for everyone, but below we will focus more specifically on the link between crowdfunding and stages in the life cycle of a startup<\/strong>.<\/p>\n\n\n\n

    When to avoid crowdfunding: Pre-seed startups<\/h2>\n\n\n\n

    <\/p>\n\n\n\n

    The very first phase of a startup's life cycle is called Pre-seed. This is the time when the business idea is conceived by aspiring entrepreneurs, so it is still in its embryonic state. The enthusiasm generated by the creative impulse and the prospect of success may lead them to want to immediately spread their idea to raise the capital needed to make it a reality, but tempers need to be curbed.<\/p>\n\n\n\n

    The Pre-seed phase must be a phase of analysis, research, and study around the market, target, and product\/service. It is a time of work that is usually kept purely theoretical. Crowdfunding is usually not the appropriate source of funding for these early activities. Pre-see startups work in bootstrapping<\/strong>, that is, using the aspiring entrepreneurs' own capital and capital raised from their circle of acquaintances (the 3Fs: Friends, Family, Fools\/Fans).<\/p>\n\n\n\n

    During pre-seed activities a startup may receive support from an incubator, which usually does not provide financial resources but rather practical resources such as working tools, space, data, etc.<\/p>\n\n\n\n

    Testing and early capital research: Seed startups<\/h2>\n\n\n\n

    <\/p>\n\n\n\n

    The goal of the preliminary work described in the previous section is to lay the groundwork for the Seed phase, in which we move from theory to practical experimentation. This means creating an MVP, Minimum Viable Product<\/strong>, i.e., a prototype with which one can begin to test the effectiveness of the product and identify a possible business model. The prototype must have all and only the essential features to be used by the first potential customers and to convey its functionality. These first potential customers are called early adopters and play a key role in testing the validity of the product<\/strong> and receiving feedback to improve it.<\/p>\n\n\n\n

    Only toward the end of the Seed phase, or when it is well underway, is it possible to start building a draft business plan and seeking external funding, for example through crowdfunding. The right time to do crowdfunding<\/strong> at this stage varies from immediately after the creation of the prototype to after the first tests with early adopters, depending on the type of product\/service, the needs of the startuppers, the characteristics of the target market, etc.<\/p>\n\n\n\n

    Indeed, it is important to have a viable and at least partially tested idea and a skeleton of processes and resources before launching into a crowdfunding campaign<\/a>, otherwise there is too high a risk of failing the fundraiser and damaging the company's reputation before it even has a chance to get off the ground.<\/p>\n\n\n\n

    In the history of crowdfunding, there is no shortage of examples of startups that failed crowdfunding campaigns<\/strong> precisely because they did not yet have a sufficiently mature product and structure. Here are two:<\/p>\n\n\n\n