Many of us have brilliant business ideas, crowdfunding can make them come to life.
I promised in my post “Startup Funding: 6 Classic Ways To Fund Your New Business” to give some more information about the big platforms used for crowdfunding.
Supporting new and viable business ideas has become common through a concept called Crowdfunding. Many business startups are nowadays depending on crowdfunding sites to secure capital to fund their projects. Today, there are several types of crowdfunding sites that exist on the internet, you need to research and come up with an option you feel will best match your needs and secure you the capital you need for a project. When looking for startup funding, it is important to make sure that you still have control of your business idea and project. Also, you need to find a site that will help you to set your goals and hold you accountable until they are successfully attained. Below are the top 5 crowdfunding sites to consider.
Kickstarter: This is a well known platform particularly in the U.S. and U.K. having been launched in 2009. It is popular and well known for successfully funding over 42,000 projects with a total of $649 million collected. The website receives an incredibly high number of visitors making it a lucrative platform for startup funding. Many kickstarters have been able to successfully secure funding for their startups in various business categories. Kickstarter charges 5% for those who meet their goals exclusive of processing fees.
Indiegogo: This crowdfunding site caters for people looking for funding to finance their projects in various categories. The site supports business, artists and non artists having launched in 2008. Indiegogo has supported many people to realize their dreams and offers useful funding advice. Their fees are 4% if you meet your goals and 9% if you don’t plus processing fees.
RocketHub: Major categories supported by this crowdfunding site include Art, Science, Business and Social categories. A&E networks have been instrumental in helping RocketHub to find more exposure. To date, over 1,500 project ideas have been successfully funded using this crowdfunding site. Their charges are 4% if you meet your goals and 8% if you fail plus processing fees.
Fundable: This is a unique crowdfunding platform that facilitates people looking for startup funding to give away rewards or equity to members who agree to fund their projects. Sources close to the site have indicated that firms offering rewards have managed to raise as much as $ 50,000 while those offering equity surpassing the $ 50,000 figure.
Crowdfunder: This site caters mainly for U.S. based businesses looking for funding to finance startup projects. Its main focus is advertising and wholesale and helps business to effectively connect with a vast local network of entrepreneurs and investors. Their fee is 5% if you meet your targeted funding projections.
The big five
Now after you know who are the 5 big platforms, it is time to look at 2 successful crowdfunding projects.
- You might have heard of Pebble, a smart watch that was priced lower than the existing competitors. Their Kickstarter campaign was a huge success and I highly recommend checking in on the project page to see what they have done in order to fund their $100,000 idea with $10,000,000 in total funding.
- In case hardware doesn’t get you excited and you are more of a software techie, my second example might be more interesting for you. Ghost is a new platform for bloggers that recently launched, Ghost went into beta shortly after they finished a successful Kickstarter campaign. The new blogging platform is intended for blogging and blogging only, they received 8 times more funding then they originally asked for. Only time will tell if the open source blogging platform can really become a huge success story with a community as big as WordPress, and if they don’t they still deserve credit for crowdfunding their project successfully.
Keep in mind that each crowdfunding website attracts different styles of crowds, and each platform has different fees to take into account. You have to research your product very well before you research the crowdfunding websites, once you find your crowed you find your website. The biggest mistake you can make, is to go and submit you idea to the most popular website (Kickstarter) without checking if the audience their is the actual targeted audience you are looking to attract.
Keep the following in mind: It is great to be cool in a room of 10 people and it can be a nightmare to be uncool on stage in front of 100 people, if you think about this when you choose your crowdfunding platform you might save yourself from a failure that only results from lack of research.
Do you have any experience with crowdfunding? Did you use a cool crowdfunded product? Share with us in the comment section bellow.