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Your Crowdfunding Campaign: Flexible Funding or Fixed Funding?

Is Flexible Funding a Better Alternative Comparing to Fixed Funding? 

I am sure all of you are well aware of all types of funding options available across all the different crowdfunding platforms. However, as crowdfunding consultants, we often come across project owners who are extremely confused when choosing between fixed funding or flexible funding. Recently,  Indiegogo has cemented their position in the crowdfunding market by introducing the brilliant masterstroke of flexible funding campaigns. It has been observed lately that a vast majority of campaigns launched on Indiegogo are campaigns with the flexible funding option. However, this does not necessarily mean that it is easier to succeed using a flexible funding campaign. In this article, we will discuss how to make this all important choice between fixed and flexible funding with the success of your crowdfunding campaign in mind.

In a crowdfunding campaign with the fixed funding option, the entire funded amount is reimbursed to the backers if the funding goal is not achieved. With flexible funding quite the contrary happens; the project receives all funds raised regardless of its outcome. As the owner of a crowdfunding campaign, it is important for you to understand that your choice between these two funding options should depend on the type of project you have in hand. For example, if you are raising money for a charitable cause, it certainly makes sense to have a flexible funding campaign. These types of projects are not impacted a great deal by reaching or not reaching the funding goal. However, this is certainly not the case with all crowdfunding campaigns.

In a number of campaigns, reaching only a certain part of the funding goal makes no sense to the project owner. For example: You want to develop a new pair of sunglasses.  You know you need to raise $35,000 from your crowdfunding campaign to research lens design, frame structure and manufacture a reasonable number in your first run.  Reaching only $26,000 of your goal is moot; you need $35,000 to make your vision for new sunglasses happen and $26,000 just won’t do it.  In such a situation, a flexible funding campaign may give the impression that the project owner is not confident about delivering on their promises. On the other hand, fixed funding campaigns provide a higher degree of transparency because all backers know they will get their money back if the campaign is not fully funded.

It is important to accept this concept with an open mind as it can only help you. However, it doesn’t mean that projects using the flexible funding option are guided by illegitimate intentions. While opting for a funding option put yourself in your potential backers’ shoes. You need to understand that even a donation of $50 is a big deal for most people in this economy. In this scenario, every donor certainly has the right to know where their money is going. Unfortunately, a flexible funding campaign does not sound authentic enough from this perspective which might cast a shadow of doubt over your entire crowdfunding campaign.

A fixed funding campaign may sound difficult from a project owner’s point of view. However, regardless of your funding goal, having people on board will never be a problem if you have a compelling idea. Therefore it certainly pays to be brave enough to ask for the exact amount you need to jump start your venture.

Everyone here at CrowdFundBuzz.Com can help you make all the right decisions right from the very beginning in our burning desire to help you achieve your funding goal. No matter how large or small your target is, contact us today and let us help you bring your ideas to life.