As an entrepreneur, your mind is probably always throbbing with business or innovation ideas. The difference between a successful entrepreneur and a not so successful one can simply be funding. An idea is just that (an idea) if it can’t be funded.
Years ago, funding projects and idea was the most difficult part of entrepreneurship. You’d have to walk into offices, make appointments, wait for ages to be called in before you can even attempt to sell your idea. Fast forward a couple of decades and we have drum rolls
What is Crowdfunding?
Crowdfunding is the use of small amounts of capital from a large number of individuals to finance a new business venture. Crowdfunding makes use of the easy accessibility of vast networks of people through social media.
This helps expand the pool of investors from whom funds can be raised beyond the traditional circle of owners, relatives and venture capitalists.
Basically, Crowdfunding provides a forum to anyone with an idea to pitch it in front of waiting investors all over the internet. People can by donation, lending or equity. This depends on the platform you choose to go with.
Sounds cool right? You can actually pitch your ideas online share and wait for strangers from all over the world to fund your project for you.
Let’s take a look at some of the best and most popular crowdfunding networks we have today:
Kickstarter is definitely the most used crowdfunding platform today. This site has raised over $220 million from 61,000 launched projects so far.
Those looking for funding set a goal and then have a set amount of time to raise the money before their project expires. These entrepreneurs are also expected to entice potential consumers with a slew of rewards for different funding levels.
The nice thing about the Kickstarter system is that it’s all-or-nothing: the funder’s credit card isn’t charged until the project meets its goal. I guess if you’re the entrepreneur this might not be so “nice” because you don’t get to keep your money unless you reach your goal through financial pledges.
Indiegogo encourages more independence unlike Kickstarter. It is actually, very much like Kickstarter except you’re not limited to an all-or-nothing strategy. It also allows for what it calls “flexible” funding. Flexible funding simply means you get to keep the funds you raised — even if you didn’t reach your goal.
Unlike Kickstarter, you can also set up nonprofits on the site.
GoFundMe is simply about donation. If you’re looking to just raise money online, for a cause, or for yourself even, try GoFundMe. You can get supporters to donate for your personal campaign. It could be anything from a personal traveling fee to your pet’s medication fee.
There are a bunch of other crowdfunding platforms you can check out like Crowdfunder for angel investors, Youcaring, Razoo, Crowdrise etc.