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Why innovative brands should harness crowdfunding to engage customers

Crowdfunding is not just about money for startups and crazy projects. Now much more sophisticated financial products are available that suit larger, well established companies. Established brands are more and more turning to crowdfunding not because of a financial need but because it allows them to engage their customers in a way like never before.

30th July 2015

Crowdfunding is not just about money for startups and crazy projects.

Now much more sophisticated financial products are available that suit larger, well-established companies. Established brands are more and more turning to crowdfunding, not because of a financial need but because it allows them to engage their customers in a way like never before. Brands are able to truly make their customers part of the company through allowing them to lend to or purchase part of the company.

Over the past few years we have seen the rise of crowdfunding. It first started with the crowd donating to entrepreneurs to get projects off the ground and more recently equity crowdfunding to enable investment from angels into startups. Crowdfunding or alternative finance has seen phenomenal growth of about 150% year on year for the past few years – depending on how you measure it. Regardless of the number it is a clear trend within our society that not only reflects the rebuilding of the financial service sector but also embraces a more decentralised transparent way of living.

This is an excellent mechanic for established businesses as it builds a team of brand evangelists, and we all know that getting your customers to sell for you is the key to marketing success. Crowdfunding also allows brands to reach out to new audiences while executing a crowdfunding campaign whether its members of the platform or people caught in the crossfire of an exploding crowdfunding campaign.

Now, a little about why the numbers work for brands better than traditional sources of finance - because investors and lenders are buying into brands they love the interest rate is often less important to a lender (in comparison to mechanics where the interest rate is the only element in a deal) and therefore very attractive rates for businesses can be achieved. Also, by offering rewards for investments it allows the brands to leverage their products to achieve more attractive interest rates from their customers. And the customers are still generally getting better returns than traditional investments.

Crowd2Fund is a platform specifically designed for established brands to allow them to harness the power of their crowd in a way like never before.

So it’s a win-win situation for all.

Ruroc, possibly the world's leading snow sports safety gear brand, are currently raising a revenue loan on Crowd2Fund, they are ‘mobilising the Ruroc army’ to raise a loan on the terms that suit their business and truly build an army of global brand ambassadors who are genuinely financially wedded to their business.

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Past performance and forecasts are not reliable indicators of future results. Your capital invested is not covered for compensation in the event of a loss by the FSCS. Tax treatment will depend on the individual circumstances and may be subject to change. Please see our Risk section before making an investment decision.

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