The growth of crowd funding has attracted many, keen to jump in and make a quick buck. They see the attraction of the mega-bucks being raised by the industry as an allure to make some easy money. Sadly for many, the unexpected costs of set up and operation all get too much, and we see almost as many sites falling by the wayside as there are start-ups in the crowd funding space. But now there is a way to test the waters and get set up at a low cost, and with an income stream from day one.
The cost of establishing a crowd funding site is usually far greater than most people estimate before they venture into the project. It is where programming meets marketing meets project management meets design. Rarely are all of these talents available “in house”, which means there is cost associated with getting up and running if you are to do it properly. Sure, there are cheap alternatives for each of these, but as Confucius say – “good thing no cheap, cheap thing no good”. Many have tried the cheaper, off shore alternatives, but many would revisit that exercise, given the extra time, energy, and cost required to deliver a sustainable and stable result. And then there are the ancillary costs and activities like legals, finding a workable payment gateway, and many of the “unforseens” that must be considered and costed into the equation.
Not only is there the costs of getting up and running, there are the constant overheads of maintaining the system, administering the site, and tending to the countless technical queries associated with the back end.
Then one must consider not only the expense side of the ledger, but the revenue required to make the whole venture profitable. The margins are typically low (around 5% gross). If we consider that about 45% of campaigns meet their funding target, just $450,000 will be funded for every $1mil of campaigns that list. At 5%, that means $22,500 gross revenue for every $1mil that lists, assuming that the site achieves the industry standard from day one, and assuming that they can get to $1mil of listings in the first year. Even if this stretch goal is achieved, the $22,500 needs to fund hosting, operational costs, external skills, and a heap of other expenses before the platform owner draws their modest income.
But now there is an option, offering a low cost of entry, and no other out-of-pocket expenses. In fact, there is a positive income stream from day one….
iPledg now offers to partner various organisations to set up an income generating crowd funding platform. Most organisations should focus on their core business or activities, and this is the key to them achieving crowd funding success in partnership with the iPledg model. The concept is quite ingenious, and allows the organisation to concentrate on doing what they do best, as iPledg administers a customised platform to the benefit of the organisation.
iPledg charges a one-off, low cost fee, allowing the organisation to have set up for them a clone of the iPledg site, using the iPledg engine and functionality, but with the organisation’s own livery, wording and images. The organisation can then assist its members, and utlisize the reach and strength of their crowd to fund all sorts of campaigns within its scope. They need not worry about running the back end, allowing them to focus on interacting with their crowd, their members, and their regular audience, as iPledg continues to operate the site itself. The partner organisation simply feeds the front end by bringing projects to the site through its regular course of business. And the best part is, the organisation gets half of the gross revenue of the site!
Picture this – You have a sporting club, with many teams and a heap of members. For a small upfront fee, you could have a crowd funding site set up and for you. You then get your teams and community to list their projects on your site. You then promote the site to your members and fan base for them to support the projects, and you encourage your project creators to do the same. Nothing more to do, just keep engaging with the people you already deal with (and you’ll have more reason for them to deal with you!) – iPledg runs the site for you. Each month, you then get a payment for half of the gross revenue generated by the success fees. That’s right! The gross revenue, so iPledg absorbs all the costs of running the site for you.
So instead of now costing tens of thousands of dollars to get going properly, any organisation anywhere in the world can get into crowd funding for a nominal fee, and then start to enjoy profits from day one – no extra costs, no headaches, and no aggravation – they just keep talking to their crowd in the same ways that they did before (and iPledg will even give them some coaching). It is through such wonderful innovation as this that anyone anywhere in the world can embark on being a success in the area of crowd funding for their creative, commercial, charitable or community initiatives.