Crowdfunding for small business

So you have a great business idea that you know will be quite successful and help you achieve your goals. You know exactly what you want to do and have also come up with strategies that will help you achieve your objectives. But there is one huge problem, which mars the otherwise perfect scenario.

Crowdfunding allows you to raise funds through a group of people with whom you connect via the internet. These people support your project and are ready to help you out in the implementation part.

So how do you reach out to the investors? Through different crowdfunding websites.  But before you move ahead from here, you have to decide which crowdfunding website among the many that exist out there, is right for you. We’ll provide you a review of the top websites here, and accordingly you can come to a decision.

Crowdfunding… why is it so popular?

Prior to reading more about crowdfunding websites, you should have an idea of the benefits which it offers.

§  Probably the best part about crowdfunding is that you are taking funds from such a group of investors that will not ask you for control or a stake in your organization later on. Plus, when you generate a revenue in the future, you will not have to give them anything out of it.

§  Crowdfunding allows you to plan for or your goals in a realistic manner and alter on even achieve them.

§  Starting a business involves many risks, but crowdfunding helps mitigate most of them.  

1.     Kickstarter

Fee: 5% of the funds you take; you pay this when you meet your goals in addition to a processing fee which is between 3% and 5%

Payment method:  Amazon Payments

Categories: Art., Dance, Design, Food, Film, Publishing, Photography and many others

Among all the crowdfunding websites, Kickstarter is probably the most well know for those of you who are in the United States and the United Kingdom. The website was first launched in 2009, and since then they have helped potential business owners connect with investors for over 42,000 projects. The total amount raised in the process is worth $649 million.

According to the stats, Kickstarter enjoys over 9.8 million visits on a monthly basis at a global level. This high amount of traffic is main reason that so many projects on this website get the funds they require.

Kickstarter has many pros. For starters, you will come across a lot of resources that guide you more about creating a successful campaign. We have already talked about the traffic on Kickstrarter which provides your project more visibility, and thus increases your chances of getting funded. There are cons too such as the lengthy approval process and the fact that the website caters to projects which belong to US and UK only.  Moreover, the projects must also have a creative side to them.

2.     Indiegogo

Fees: There are two separate plans: all-or-nothing and flexible funding plan. For the former of these, the fee is 4% if your project is successful. For the latter option, you are charged at a rate of 4%, provided you achieve your goal. If you do not, the fees will increase to 9%. As for the transaction fees, they have to be paid additionally at a rate of 3%.

Payment options: PayPal, FirstGiving, ACH and wire transfer

Categories: Art, design, film, gaming, music, theatre, writing, sports, technology and many others

Indiegogo is a platform that offers its services across the globe, supporting startup businesses, non-profit organizations and artists. The website first started its journey in the year 2008, and since then has aimed to ensure that people all over the world should get a chance to turn their dreams into a reality.

In the simplest of terns, Indiegogo can be stated as a flexible website which is open and accessible for all types of campaigns no matter wherever in the world they are launched. The best things about Indiegogo are the fact that there is no application process to go through and the website caters to a diverse range of projects. As for the downside, Indiegogo become expensive if you fail to accomplish your goals.

3.     RocketHub

Fees: If you complete your campaign, the fees are 4% and if you do not, the fees will rise to 8%. The transaction fees are 4%.

Payment options: Digital Payment and Secure Check

Categories: Art, science, social and business

Recently, RocketHub partnered up with A&E Project Start Up, which allows them to offer your project a unique visibility. Ever since their establishment, they have helped in funding over 1,500 different projects. RocketHub is also regarded as a leader in crowdfunding education.

The pros of RocketHub include the user-friendly interface and access to a number of tools that allow you to build a better project and business. In terms of cons, the monthly traffic of RocketHub is less than Kickstarter and Indiegogo.

4.     Crowdfunder

Fees: 5% if you achieve your goal; the Amazon FPS Transaction Fee has to be paid separately at 1.9% to 5%.

Payment Option: Amazon Payment

Categories: Wholesale advertising

A platform which offers it services to businesses based in the US, Crowdfunder is a blend of both investment and donation based funding. The website is only for those companies which offer a product or service. Through the Crowdfunder, you can reach out to over 20,000 investors and entrepreneurs.  The website also encourages online-and off-line collaboration among its network.

The primary benefit of Crowdfunder is the fact that it bends together online and offline crowdfunding opportunities, thereby emphasizing on the long term growth of a business. As for the limitations, it only caters to companies which are going to earn a profit.

So which of the above platforms are you going to choose for your business idea? Whichever one it is, make sure you capture your idea into a high quality and enticing video. Plus, you should offer rewards which other people will actually want.

Good luck for getting your business funded!