Welcome back, Retailers!
Whether you’re a startup or a tried-and-true business, chances are you have money on the mind. While great ideas are common, great execution – and finding the funding – is not. This has been the driving force for the evolution of crowdfunding.
Crowdfunding is a funding campaign that raises small amount of capital from a larger number of individuals in order to fund… well, anything. No, seriously. Earlier this year a homeless man in Boston found a backpack filled with over $2,000 cash and $40,000 in traveler’s checks. Rather than use the money for his own personal gains, the Good Samaritan turned the backpack over to the police. Within weeks of the story, the crowdfunding site GoFundMe.com raised over $150,000 to reward the man.
Analyst project that the crowdfunding market will have raised $5.1 billion in the year ended 2013. Projects have ranged from launching a new video game (the most lucrative campaign was a Space Adventure game; it raised over $14 million) to funding new movies such as “Pi” by filmmaker Darren Aronofsky.
This multi-billion dollar industry is booming, but with so many different types of crowdfunding campaigns out there, it’s important to find a site that focuses on business. According to the CEO of Crowdfunder, Chance Barnett, crowdfunding sites have different models and focuses.
“Business owners are using different crowdfunding sites than musicians. Musicians are using different sites from causes and charities.”
To help you navigate, here’s a simplified list of top crowdfunding sites that have a business focus:
- KickStarter – this site is one of the earliest web-based crowdfunding sources. It is donation based, and supports most types of projects.
- Crowdfunder – this site is designed specifically for businesses. The site offers both donation-based and investment crowdfunding.
- Somolend – this site is geared specifically toward small businesses in the U.S. and provides debt-financing and loans to already existing businesses.
- Indiegogo – this site began as a funding source for the arts but has since expanded into many markets, including entrepreneurial. These guys were responsible for the awesome “Let’s Build a Tesla Museum” project which raised $1.3 million (almost twice their original goal)
- RocketHub – donation-based crowdfunding site geared toward government, business, and science. They also have a highly recommended Success School for those new to the crowdfunding industry.
While designing your crowdfunding campaign, keep in mind that it is more than a funding opportunity. Many of the companies on these sites are here to make a name for themselves. They may have a product or service that they know others would enjoy, but are still little-known. So, while crowdfunding could help you expand your product line, it could also help you in the PR department.
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