According to a publication from INEI (National Statistics and Informatics Institute), 8 out of 10 Peruvian ventures fail before reaching five years of life. One of the reasons that lead to this outcome, addressed in the 1st Entrepreneur Roundtable organized by the Wiese Foundation is the lack of access to traditional sources of financing faced by these ventures, which prevents them from moving on from the stage of creation to operation.
In the face of this, there are different solutions. For example, seeking the support of universities, the financing from programs promoted by the State, the support from incubators and programs such as the Entrepreneur Fund of the Wiese Foundation.
Another way to obtain financing to boost the growth or the operation stage of a venture is through crowdfunding. Next, we tell you more about this modality.
What is crowdfunding?
Asana Business defines crowdfunding as a form of collective financing that is conducted through online platforms, where a large number of people can invest small sums of money to support projects, business initiatives, social or creative causes.
Instead of depending on a single source of financing, crowdfunding allows entrepreneurs and creators to obtain the support of the community, which can provide not only the capital needed to launch an idea, but also a base of engaged and loyal followers.
What are the benefits of crowdfunding?
The main advantage is to get the financing you need for your venture, but it is not the only one: in addition to this, you also have the following:
- It gives you the opportunity to get feedback from specialists and improve your products or services.
- It allows you to know the interest of the market in what you offer, which is useful before investing large sums in your initiative.
- It is a way for you to market your venture, not only among investors, but also among end-users.
- The investors or donors can become your clients/customers.
- It helps you to form a community.
- It allows you to know the existing demand.
- It is a good way to test not only your product, but also the way in which you present it to consumers.
How to help the growth of your venture through crowdfunding?
It is important that, if you want to apply to a crowdfunding platform, you take into account some recommendations. For example:
- Create a solid value proposition. Your proposal must be clear and able to show participants that it is worth investing in.
- Define your goals. This will allow you to estimate how much money you need to reach them and in how much time.
- Choose a crowdfunding platform. You can start with one that is small and which has a presence in the country. It’s a good idea to make a list of your options, weigh the pros and cons, and then apply.
- Present your project. In this presentation define your project, its objectives, the product or service you offer, the problem that you are looking to solve, the community that will benefit from your initiative, the amount you need to start, the length of time that you estimate you need to achieve results, the modality of reward offered, etc. In this phase, you must also set the closing date for the financing round.
Learn more about the Entrepreneur Fund of the Wiese Foundation
In addition to the crowdfunding option, another way to obtain financing for your social enterprise is through financing programs such as the Entrepreneur Fund where, in addition to an economic amount, the beneficiaries are granted professional advice in the form of business consulting, mentoring sessions aimed at the fulfillment of objectives and personalized trainings.
Seven social enterprises have been selected for the second stage of pre-acceleration that goes from April to August of 2023, in which the due diligence process has been carried out in collaboration with UTEC Ventures and W Capital. During this process, the selected companies have been working together with specialists and mentors in various areas of their business, including the detailed analysis and validation of their ability to attract investment from third parties.
In addition, they are being advised on the development of the necessary instruments to present their companies to potential investors. Simultaneously, they are being connected with successful social enterprises in order to learn about their testimonies and success stories, as well as training on topics related to entrepreneurship, with the aim of preparing them to present their projects to the program’s investment committee. Are you interested in learning more about the Entrepreneur Fund and everything about its second stage? We invite you to learn more here!
