Crowdfunding, or raising money from the Internet “crowd” has really taken off. Just a couple years ago there were only hundreds of companies who had raised Crowdfunding. Today we are in the tens of thousands.
Below is a brief overview of the many Crowdfunding platforms to consider.
The Largest Crowdfunding Sites:
Kickstarter.com is the largest site for funding projects, mostly creative projects. Having the largest network is nice, because the more people visiting the site, the more they have the chance to find you (as opposed to driving all of the traffic through your own efforts). The downside of Kickstarter is that not every project is accepted and they charge a success fee of 8% in the event you get funding. Also, if you raise fewer funds than you need, you don’t receive any of it (but if you raise more than projected, you get the surplus).
Rockethub.com is primarily for funding creative projects. Their network is not as large as Kickstarter’s, but still substantial. They accept more projects, and also have a success fee of 8%. I suggest scanning this site for similar projects to yours. Were they funded? How many days long was the funding period? Finding “comps” like yours can help you determine if you want to post your project here, on Kickstarter, or somewhere else.
GoFundMe.com has heavy traffic and is unique in that it doesn’t charge a success fee if you get funded. They do charge a $9 fixed monthly fee, which is really minimal but still screens out less serious competitors and donors will take you more seriously. You can also raise money for anything here without an end date to the fundraising time frame you’re given. While I have not used it myself, GoFundMe has gotten positive reviews on many blogs.
IndieGoGo caters to business owners-particularly artists and creative projects. You can make donations tax deductible here, which is fantastic because that’s a deal breaker for some donors (and you don’t want to have to form a non-profit yourself just to receive donations…or pay taxes on them!). Scroll through the different projects on this site to get an idea of how easy to use it is for visitors and entrepreneurs.
Rock The Post is similar to Kickstarter in a lot of ways. If you don’t reach or surpass your funding goal you won’t receive any of the funding. This is good for donors but can be frustrating for you. More uniquely, there are many other entrepreneurial members of their online community who can help you to brainstorm or even implement ideas. So think of it as a way to get connected to potential partners and support as well as funding.
Niche Crowdfunding Sites:
Localstake is a new site that is focused on helping local businesses get funding. This is a great idea, because most investors would rather help out someone local. One reason is that they benefit from helping their community become stronger, but also because they are more familiar with local concerns and feel like they can keep an eye on things (eating at your restaurant, etc.). My experience is the more tangible you can make your pitch and plans for those you approach, the more “for real” they perceive it to be.
FundaGeek is a site geared towards funding technology, invention, and education projects. Many college students and professors use it to advance their research and submit ideas for funding as an alternative to grants and give people more freedom and control over the project’s purpose and implementation. I would definitely check this site out if you have a relevant project, as more donors here will be inclined to support your cause.
Appsfunder is the “kickstarter for mobile app design.” On Appsfunder, you’ll start by telling the story behind your idea, get funded by milestones as it’s developed, and then launching it in the iTunes and Google Android markets.
Appsplit focuses on mobile, web, and desktop apps, and lets you hold “open” or “all-or-nothing” funding campaigns. The latter type are the same as with Kickstarter, but making your project “open” means that you receive the funds as they are donated, regardless of whether you reach your full projected funding goal or not. This is helpful because even some funds are better than none in some cases. If I were making an application, I’d definitely check out Appsplit and Appdfunder first.
Equity Based Crowdfunding Sites:
Once the SEC provides its rulings on how equity-based crowdfunding will work, we will see a crop of new equity-based crowdfunding sites. To date, several of these sites have already launched, but aren’t fully functional. My favorite (because I know and like the people behind it among other reasons) is Crowdfunder.
Hopefully with this selection of sites available, you’ll catch the vision of crowdfunding as well. It’s no longer a question of “Should I?” — now it’s a matter of which site, for what, and when. Happy fundraising!
How to Get Funded in 90 Days or Less
If you need funding fast, you have to use Crowdfunding.
1. It’s fast. You’ll get the money in just 90 days or less.
2. It’s easy. You don’t even need a business plan – you can get started right away.
3. You keep ALL the money. It’s not debt, and you don’t you don’t give up any ownership in your company either…