Simon Deane Johns is a solicitor at Keystone Law
What are the benefits of crowdfunding? Crowdfunding [funding a project or venture by raising many small amounts of money from a large number of people] is the most efficient way to move funds from many savers and investors to responsible people and businesses – whether through donations or rewards, peer-to-peer lending or crowd-investing. It enables savers and investors to diversify at the same time as adding badly-needed alternative finance options.
Mhairi Mackenzie is the director at Bonnie Bling, a jewellery company
It can be hard work: There have been so many added value perks to my crowdfunding campaign and my business as a result of it, but I will openly admit that it is a lot of hard work to set up and then maintain the momentum of the project to ensure it hits the target. The administration involved at the end of the project can be time-consuming, but a good spreadsheet and some helpers was what worked for me.
I thought crowdfunding was perfect for my business: My products are all about my customers, and if they didn't think I had a good product they wouldn't want to fund me. I really didn't have much to lose, but an awful lot to gain if it worked. The fact that so many people believed in me and wanted to support what I do and help create a sustainable, local business was really important to me and was arguably as valuable, if not more so, than the actual money to buy the equipment.
You need to make contacts: The importance of media channels such as social media, regional press and even national exposure should not be underestimated. You really have to be prepared to use all the contacts you have and in any way possible to raise enough awareness. But I enjoyed it all, I am passionate about what I do and sharing it with others is a positive part of running your own business.
Ayan Mitra is the founder and chief executive of CrowdBnk, an online crowdfunding platform
Learn from your mistakes: One of the challenges an entrepreneur should consider while going down the route of crowdfunding is the way forward if the crowdfund is unsuccessful. It's not a disadvantage as such, but entrepreneurs need to be aware that the feedback from the crowd, be it in the form of investment or general feedback, could be negative as well, and they need to be able to adapt to that and deal with it.
Pauline Quigley is the director and founder of CakeCetera, a cake delivery company
Keep in touch with your supporters: Tell them your story and convince them of your goals. Customers and followers like to feel part of your success story and quirky rewards from pledges will help too. Mentioning them and thanking them regularly is also essential.
Feedback won't always be positive: Expect some negativity. You are asking people for money and it can be a little embarrassing. I had various emails from people asking why I felt the need to crowdfund as "clearly I was a very successful company". I had a lot of followers on Facebook and Twitter and my website looks good but sadly that doesn't mean they all order from me. At that stage I was struggling to make £80 per week - so just be prepared for a little negativity, but generally most people are very positive.
Darren Westlake is chief executive and co-founder of Crowdcube, an online crowdfunding platform
The main advantages of crowdfunding are: It's cost effective, will give you a lot of exposure from a marketing point of view, you can gain crowd feedback on your business and it can be a lot quicker than most other forms of finance.
The opinions provided by the experts in this Q&A are for information purposes only. We do not accept responsibility for any advice given and cannot guarantee its accuracy. The opinions expressed by the experts are not intended to constitute legal or other professional advice, and should not be relied on, or treated as a substitute for specific advice relevant to particular circumstances.
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