Ask HN: Crowdfunding – Best Practice • Hacker News Board

Ask HN: Crowdfunding – Best Practice

#1

Post by protdum » Wed, Jun 10, 2020, 7:12 AM UTC

Hi guys, I've been looking at how to raise funds from my small startup and a lot of ppl are pointing that crowdfunding could be the way to go. In most cases I see that ppl have physical products that they give away to those who support the idea, but how about if you're doing online software product? I see that there are also different types of crowdfunding - those where you give equity and those where you give your product away.

Any suggestion, comments, ideas are more then welcome :)

Re: Ask HN: Crowdfunding – Best Practice

#2

Post by mytailorisrich » Wed, Jun 10, 2020, 7:34 AM UTC

My view is that you always want to avoid giving equity. Whether you have a physical or online product does not make much difference in allowing you to give it away for free. In fact it's even easier and cheaper to do with a software product that has no marginal cost. You could consider to give free lifetime licenses to early backers, for example.

Re: Ask HN: Crowdfunding – Best Practice

#3

Post by protdum » Wed, Jun 10, 2020, 8:07 AM UTC

mytailorisrich wrote: post #2

My view is that you always want to avoid giving equity. Whether you have a physical or online product does not make much difference in allowing you to give it away for free. In fact it's even easier and cheaper to do with a software product that has no marginal cost. You could consider to give free lifetime licenses to early backers, for example.

Awesome input! That's that I was thinking. Out product will have freemium and premium subscription. Premium subscription would remove ads and give you the access to premium features. So, I was wondering if I could leverage that over getting backed up by the crowd?

Re: Ask HN: Crowdfunding – Best Practice

#4

Post by bitcrazy » Wed, Jun 10, 2020, 12:42 PM UTC

Since yours is software its much easier to give away freebies. Discount codes, special features, early access features, etc are much easier to do than a physical product. Also its a great way to get feedback and generate buzz on the project.

Echoing the other comment, I would agree to avoid giving out equity. The customer is far less vested in your company's success than you are.