Students in Xizang Province in China - Crowdfunding - Case Study Example

Crowdfunding Case Study: Students in Xizang Province in China Name Institution Date Table of Contents Table of Contents 2 Crowdfunding 2 Introduction 2 Strategy to Implement Crowdfunding at the Organization 3 Amount of money sought 8 Target details and timeframe 9 Crowdfunding platforms 9 Recommendations and conclusions 10 References 13 Crowdfunding Introduction Crowdfunding is one of the important concepts that have emerged recently and it is used with an aim of raising funds. It involves funding a project or a venture through raising monetary contributions from a large number of people through the internet. The crowdfunding model has been made popular with the increased internet connection. Various sites have been established for the purposes of facilitating crowdfunding. In Australia, Possible.com is one of the main sites that are commonly used for the purposes of crowdfunding (Belleflamme, et al, 2014). The concept of crowdfunding usually brings the people with an idea together for the purposes of launching it and ensuring that the required amount is obtained. Crowdfunding industry is growing at a fast rate and it is currently worth about 5.1 billion worldwide. Activities such as collecting money for the poor kids have utilized the concepts of crowdfunding in the past. The paper is therefore a proposal for crowdfunding aimed at raising money for the poor kids from Xizang province. Description of the client organization The group members are students at ECU and from China. The crowdfunding concept has been selected for the purposes of helping the poor kids and students from Xizang province. The project will be used for raising money and the undergraduate students from Guangdong province will be involved in the process of raising the funds. The process will be useful and will contribute positively towards the welfare of the poor kids and students. The possible.com site will be used for the purposes of implementing the crowd funding process. The not-for profit client will therefore be involved heavily during the process of raising the funds. Strategy to Implement Crowdfunding at the Organization The process of organizing a crowdfunding requires proper preparation as well as strategy. Different outreach tools will also be used during the process for the purposes of ensuring that the marketing campaign is successful. The first step during the process will involve scheduling everything which will need the preparation of the calendar to guide the different activities including the launch date. The calendar prepared has to be followed strictly and updates will have to be carried out after every two weeks. Active engagement with the contributors has to be carried out from time to time so as to ensure that the goals and objectives of the contributions are met (Mollick, 2014). Photos of the team members and the children who are targeted by the project will be obtained and posted on the social media. This is considering that the social media will be used actively for the purposes of carrying out the campaigns. Any achievements will also be posted in the social media. Examples of socials proof will also be highlighted during the process for the purposes of ensuring that the process is successful. The team will have to work with influential advocates who are well known so as to influence the other people to contribute. The presence of influential advocates plays an important role in terms of acting as a social proof (Schwienbacher & Larralde, 2010). All the activities during the process of crowdfunding will involve all the members of the team. Meetings will be held once every week for a period of five weeks in order to discuss the various concepts and activities. Building credibility and legitimacy will form the most important aspect of the process. Most of the donors and backers require proof that the project is legitimate (Agrawal, et al, 2011). When using the crowd funding concepts it is not possible to meet personally most of the donors and backers as they could be strangers and hence the need for providing proof or evidence to show that the project is legitimate. The team will therefore be positing photos and videos through the use of social media from time to time so as to provide proof to the backers. Frequent updates will be carried out in order to update the backers of the progress taking place. Frequent emails and updates on the social media have to be used throughout the process (Lambert & Schwienbacher, 2010). An open dialogue will also be encouraged with the people who will be supporting the program. This is considering that the project will mainly target the Chinese undergraduate students who live in Guangdong province. Responses will be provided to all the questions or issues that will be raised by the supporters of the project. This is for the purposes of ensuring that the supporters feel that they are part of the project. The frequent interaction with the supporters is also useful in terms of building trust during the process (Kuppuswamy & Bayus, 2014). There is more to crowdfunding than solely raising finances. A successful crowdfunding project can give the organization the appropriate monetary kick start if properly executed. The campaign should have a clear objective and it must begin with a goal that all people entailing potential funders, partners and staff can relate to. The objective must be specific, concrete and clear. Setting up of funding target is the next step of the crowdfunding campaign. Finding the correct amount of money the campaign wishes to raise is significant. Since donation-based crowdfunding platform can be appropriate in raising funds to assist students, this is the next step. Effective advertisement of the campaign is an imperative element in accessing the people or crowd. The most direct and best scheme of advertising is via online videos since they are the easiest and fastest way of giving potential donors a comprehension of the project cause. The fourth step entails selection of proper rewards. Several donation-based crowd funding offer donors rewards in exchange for the contribution. The foundation can give well designed and smart T-shirts to the donors. Securing of guarantees is the last step of establishing a crowdfunding campaign. One of the hardest parts of crowdfunding is progressing from the nil donations zone. Donors usually follow masses, and this implies that they will feel comfortable offering financing to a campaign an objective of approximately sixty thousand dollars if there hasn’t been a single dollar that has been raised. Seeking the help of family and friends is of great importance. Greatest supporters, friends, and family should be contacted and offered with details on the plans to get on the crowdfunding campaign. They must be encouraged to make donations within the first hour or day of the launch of the campaign. The following table represents the meeting log of the meetings that will be carried out in order to ensure that the project is successful. Date Attendance What needs doing When will it be done Comments on completion 24/03/2015 all Preparation of the facts about the project and setting the target. During the meeting. The group will be able to provide all the details with regards to the project. 31/03/2015 all Open an email and social media page for the project. During the meeting. The supporters will be able to obtain more information about the project and interact with the team members. 07/04/2015 all Creating a marketing event During the meeting More awareness will be created among the supporters. 14/04/2015 all Updating the progress of the crowdfunding on the social media During the meeting The supporters will be able to know about the progress being made. 21/04/2015 all Final review of the crowdfunding and conclusion of the project. During the meting Determining whether the target was met. The table below shows the resources that will be required during the crowdfunding process. Resources When required Relevance Time needed Estimated costs Emails and social media pages Immediately For communication and marketing process. The entire process of the project. Free of charge laptop Immediately It will be used for social media, emails, communication, uploading pictures and monitoring the events. Entire process of crowdfunding $200 Advertisements During the marketing process Creating awareness about the project among the supporters. During the marketing process. $ 50 Human resources Throughout the process Implementing all the activities of the project Throughout the process. None, the members will carry out the process. The table below is a SWOT analysis of the strategy that will be used during the crowdfunding process. Strengths Weaknesses The strategy will be able to reach a high number of people. The strategy will be able to convince the supporters of the project. The strategy may fail to create awareness among the other members of the public. Opportunities Threats Involving the other students and sponsors who are not from China. Some of the sponsors may not be fully concerned of the process as it is not common among some people. Amount of money sought The crowdfunding targets a charitable activity which is aimed at improving the livelihoods of the children in the poor communities. As a result of the needs of the poor kids and students, is quite high. The project will therefore target a sum of $ 10,000. This amount will go a long way in ensuring that the needs of the kids as well as the poor students are addressed. Target details and timeframe The crowdfunding process will take a period of one month which will be enough for all the funds to be raised. During the one month period, various activities will be targeted. This will involve the marketing process through the internet and the social media. Constant communication with the sponsors will also be carried out throughout the process. The team members will be carrying out meetings on a weekly basis in order to discuss the progress that is being made. During the meetings, any new developments should be discussed and updated during the meetings. Due to the urgency of the situation, one month is enough for all the activities to be carried out. Crowdfunding platforms Crowdfunding takes several diverse types regarding the diverse purposes of the funders, platforms and creators. There four models of crowdfunding. According Bechter et al (2011) crowdfunding models are categorized in accordance to the provisions under which fund is offered to the individuals raising the finances. These models are equity-based crowdfunding, donation, rewards-based crowdfunding and lending-based crowdfunding. Equity based crowdfunding is a platform for projects that offer a share in the future revenues. Under this platform, investors have the motive of getting a return on the investment, along with other tangible benefits and rewards. Equity-based crowdfunding provides an additional means of raising equity for a business undertaking, with all related risks. In rewards-based crowdfunding, participants get non-monetary incentives as a return of their contribution. Reward-based crowdfunding is usually utilized for smaller customer products or creative businesses, where essential pre-funding for production is connected to a preliminary demand assessment. If an ample number of individuals get into the financing agreement, the capitalist gets market validation and pre-funding for the activities. Participants support the project for social or intrinsic motivations. In lending-based crowdfunding, investors may select to lend finances in return for interest after the project’s goal is attained and the projects become a success. In the donation platform, donations or contributions are made for certain, primarily social projects that are often managed by nongovernmental organizations. Donors don’t get concrete benefits in exchange of the donations they give. Donation-based crowdfunding assists nonprofit organizations to finance projects and major costs, but it might also be useful in funding common function activities and creative activities (Bechter et al, 2011). Recommendations and conclusions It is recommended that this model should be used for the purposes of funding. This model is a viable model for funding since it has the potential of attracting the targeted clients as well as the strangers or people who are not involved in the project. It is recommended that this model should be fully embraced but the members have to ensure that adequate measures to ensure that the marketing process is successful. The creation of awareness is the most important aspects when using this model and it should be given a lot of priority. Crowdfunding is an inventive scheme of raising money for entrepreneurs that has increasingly become popular in the internet era. Crowdfunding is working based upon the capability to pool funds from persons with a collective interest and have the will to offer small donations towards a venture. Crowdfunding is beneficial in that it uses social networks to reach a large number of investors or funders who fund a business venture or project. The donors are usually given returns in exchange of their contributions. The availability of information about a project on the internet attracts a huge pool of individuals wishing to support the venture. Because making a presentation of an idea for public is a significant aspect of crowdfunding, social networks may exploit the number of individuals it is offered to. In addition, the benefits of crowdfunding can be increased by combing it with crowdsourcing. If there is a successful pairing of crowdfunding with crowdsourcing, the decisions regarding the project remains in the hands of the entrepreneurs, but they also receive useful advice and suggestions from the crowd. In conclusion, it is evident that that the use of crowdfunding is increasingly becoming popular as means of raising funds. The internet has played an important role in ensuring that the concepts of crowdfunding are made possible. The project is for charitable purposes while the client will be non-profitable. The crowdfunding process will take a period of one month and the marketing of the concepts has to be carried out. The project targets $ 10,000 which will be useful in ensuring that the poor kids and students are able to benefit. The group will have to carry out meeting from time to time in order to monitor the progress and make improvements. It is evident that the concept of crowdfunding requires constant communication with the sponsors. It is also evident that the group will have to incur some costs due to some of the resources that will be required. References Belleflamme, P, et al. (2014). Crowdfunding: Tapping the right crowd. Journal of Business Venturing, 29(5), 585-609. Mollick, E. (2014). The dynamics of crowdfunding: An exploratory study. Journal of Business Venturing, 29(1), 1-16. Schwienbacher, A., & Larralde, B. (2010). Crowdfunding of small entrepreneurial ventures. HANDBOOK OF ENTREPRENEURIAL FINANCE, Oxford University Press, Forthcoming. Agrawal, A. K. et al, (2011). The geography of crowdfunding (No. w16820). National Bureau of Economic Research. Lambert, T., & Schwienbacher, A. (2010). An empirical analysis of crowdfunding. Social Science Research Network, 1578175. Kuppuswamy, V., & Bayus, B. L. (2014). Crowdfunding creative ideas: The dynamics of project backers in Kickstarter. UNC Kenan-Flagler Research Paper, (2013-15). Bechter, C., Jentzsch, S., & Frey, M. (2011). From wisdom of the crowd to crowdfunding. Journal of Communication and Computer, 8, 951-957 Briciu, S. ,Capusneanu, S.,& Topor, D. (2012). Developments on SWOT analysis for costing methods. International Journal of Academic research, 4(4), 145-153 Micic, I, (2014). Crowdfunding: Overview of the industry, regulation and role of crowdfunding. New York: Random House. Read More