August 21, 2013
Crowdfunding is a relatively new way to raise money online for a variety of ventures. It can be extremely effective, but in order to find success, you need to know which sites are the best fits for your project or organization. Whether you’re a start-up launching a new product or software or a creative looking to tap into your network of friends and fans for support, the ability to raise capital from future customers is changing the way businesses and projects get off the ground.
Let’s take a look at some different options with varying models:
If you want to fund a creative project, Kickstarter is the place to go. According to the site, more than $725 million has been pledged since it was launched in 2009. Under the Kickstarter model, funding is all-or-nothing. This means that if your project doesn’t meet its goal, you don’t get any money despite any pledges you may have received. Donors usually receive some sort of perk from the artist or company they are backing, such as a signed copy of an album, tickets to a film’s premiere or an early model of a new product.
Indiegogo is another site that can help you raise money for a creative project but also can be used for other endeavors such as non-profits. Unlike Kickstarter, funding does not have to be all-or-nothing. If you choose flexible funding you can keep all contributions even if you fall short of your goal. Indiegogo charges a nine percent fee of all funds if your goal isn’t met, and only a four percent fee if your goal is reached.
Crowdfunder is designed with small businesses in mind. It’s a great place to go if you’re an entrepreneur without any wealthy investors. Crowdfunder uses its expanding network of investors and entrepreneurs to help connect small business owners to backers nearby. Crowdfunder cannot be used by non-profits.
CrowdRise is focused on helping charities raise money. It uses social media to help spread the word and has the primary goal of making fundraising fun by implementing games with a rewards point system into donations. All donations made to charities through CrowdRise are tax deductible.
GoGetFunding can be used to raise money for almost anything and, like many sites, users offer rewards for various donations. The site charges a four percent fee of money raised.
RocketHub tailors to a wide variety of endeavors and allows artists to directly connect with promotion and marketing partners. The site has partnered with the A&E television network to give projects that the company finds compelling the opportunity to gain more exposure through their A&E Project Startup.
The main focus of GoFundMe is for personal needs and goals. Whether you have medical bills that you can’t pay yourself or need to make it across the country for your sister’s wedding, GoFundMe can be a great tool for raising the money. Users create their own personal site where they describe their goal and can post videos, pictures and updates while sharing through social media. This site could work well for an individual entrepreneur with a strong network building a small company.
Startup businesses make a profile and can offer either equity or rewards in exchange for fundraising on Fundable. According to the site, businesses that choose to offer shares of the company typically earn between $50,000 and $10 million, while those that offer rewards tend to earn less than $50,000. There is a $99 monthly fee for Fundable that only applies during active campaigns.
Quirky works a little differently than a majority of crowdfunding sites. It targets inventors by allowing them to submit ideas that site members can vote on. Every week, heads of Quirky get together and go over the top ideas submitted and decide which ones to start working on and manufacturing.
If you have an app in development you can post it on appbackr and backers can purchase wholesale copies of the app from you. When the app begins to sell, the site keeps track of sales and your donors make money from the purchases.
Do you know of any other good crowdfunding sites?
Allison Rice, director of marketing for Amsterdam Printing, has extensive experience in sales and marketing. At Amsterdam Printing, a leading provider of custom pens and other promotional items such as personalized USB drives, Allison is focused on providing quality marketing materials to small, mid-size and large businesses. She regularly contributes to the Promo & Marketing Wall blog.