Finding capital is the Achilles’ Heel for small businesses. Banks are the obvious option, but what if they don’t provide conducive interests or the desired amount? Well, fortunately, modern businesses can rely on crowdfunding to give their business the required financial boost.
What is crowdfunding for business?
As the name suggests, crowdfunding aims to raise investment capital through the collective efforts of friends, family, customers, funding organizations, and investors. The crowdfunding investment leverages social media and crowdfunding platforms to tap into the collective efforts of a large crowd – utilizing their network for greater reach.
What makes crowdfunding different?
Crowdfunding is the complete opposite of the mainstream approach to financing a business. In the conventional approach, if a business needs funds, they need to shop their ideas or products to venture capitalists, seed funders, angel investors, etc.
Crowdfunding sites, on the other hand, provide entrepreneurs a single platform to build, showcase, and pitch their products. This model streamlines the traditional approach and gives investors direct access to your idea – without waiting for appointments or rounds to clear.
If you want to give crowdfunding a try, here are 3 of the best sources to explore:
Kickstarter connects creators with resources that can bring their ideas to life. So far, the venture has helped over 15 million artists, musicians, designers, and filmmakers with nearly $3.7 billion in about 140,000 projects. Creating a project is free and if the funding is successful, a 5% fee is owned from your funds.
Indiegogo is more than just a crowdfunding platform. They also have a thriving marketplace for unique and innovative products. Entrepreneurs have raised close to $1 billion over 650,000 projects. Indiegogo also has a global network of early adopters – where you can test your MVP to see if your idea has legs. Indiegogo charges a 5% fee for all projects. If you’re raising money for a cause, you can access its sister platform GoFundMe, without paying fees.
Another awesome platform for artists, musicians, and writers to get paid by running membership businesses for their fans. Creators have raised $350 million. Interestingly, an average patron pays a fee more than that of monthly subscriptions of Netflix and Spotify.
So, there you go. Which of these platforms are you going to try? Have you ever done crowdfunding before? Do share your thoughts with us in the comments below!