Ever wanted to know about crowdfunding? Things are starting to take shape in Cambodia and today, we present you the breakdown, statistics, and tips of crowdfunding in Asia!
Firstly, what IS crowdfunding? It is a fundraising method for startup businesses. Crowdfunding is all about “strategically finding other organizations or individuals to “sponsor” and ultimately help raise money and fund a new startup business”. This helps entrepreneurs such as yourselves out by easing the load of coming up with capital to start your business.
There are four different types of crowdfunding. Equity, loans, reward and donation. Reward and donation-based are the most popular in Asia. Some of such sites that are very popular in Asia include China’s Demohour and Dreamore, as well as Taiwan’s Flying V.
Demohour reportedly received millions of USD in funding from Matrix Partners China. Dreamore has raised more than 6M yuan (almost 1M USD) for more than 300 projects. Flying V has a campaign success rate of 45%, which is higher than world-famous Kickstarter who stands at just 41%.
So as a startup founder or member of a startup in Cambodia, why should you crowdfund? Firstly, it allows you to remain in control of your business (reward and donation-based) and have full creative freedom. There will not be investors limiting you or changing your idea, just you and the support of those who backed your project.
Secondly, crowdfunding helps you gain critical feedback from your potential consumers. It works such that you still have time to fix minor cracks and flaws before delivering your product, service or project upfront. It is also a great tool for market validation should you wish to get future funding. How so? If people want to donate to your project, or contribute to get your product, it means you do have a market.
Thirdly, crowdfunding gives you more options. With countless of platforms, you can raise money across the best ones for you. Additionally, you can also gain access to a wider pool of investors.
However, there remain some issues with crowdfunding in Asia. Some of these are: Culture, Trust and Framework. Culture refers to how society works, and it seems that donating without expecting monetary compensation is not in Southeast Asia’s culture. Trust is all about having faith that the money you have put in will be of good use and not abused. It could also be about whether the startup can deliver what they have promised (if it is a hardware startup). Framework is an issue as many governments have yet to establish regulations to promote and protect an ecosystem for investors and fundraisers.
That is not to say that crowdfunding will not pick up in Cambodia! In fact, at the Crowdfunding Asia 2014 event in Singapore, Mr. Kan Channmata, Cambodian Secretary of State, MPTC, expressed his desire for Cambodia to leverage crowdfunding to boost our entrepreneurial class and grow our economy.
Cambodia also has its own homegrown crowdfunding platform slated to launch in April 2015. Titled CamboFund, this project is headed by Cedric Jancloes, who has been in Cambodia since 1995 and has worked heavily in the development sector. His platform will be open to all types of projects, in order to encourage Cambodians to help each other out. To combat the issue of trust, he says that all projects will be handpicked and are required to go through stringent checks before they are open to the public to contribute. You can check them out here.
Are you on board the crowdfunding bandwagon? Great! Here are some tips we have compiled for you:
Storytelling: Tell your campaign’s story well. What is your purpose? Why are you doing this? How will it impact the society or respective field? Make sure your story is relatable to the audience.
Planning: Map out your whole campaign well, and set realistic goals as well as timeframes. Make sure you are prepared for any setbacks!
Interest: You have to gain interest in your campaign for it to work. To gather up a crowd, use social media to spread awareness of your campaign.
Monitor: After you have launched your campaign, keep an eye out for any feedbacks or comments from your potential consumers. Remember to update your audience regularly so they know your progress and will continue supporting you.
Check out the full infographic below!
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