A successful crowdfunding campaign can generate a lot of buzz, validate your concept, and raise you the much needed funds to grow your business. New crowdfunding sites have been popping up more and more recently; even more so since the CROWDFUND Act was passed in April 2012. The new act allows common individuals to easily invest in new projects and startups via sites such as Kickstarter and RocketHub. In the past, only an accredited investor that had $1,000,000 or more in assets and/or earned more than $200,000 a year was able to fund investments.
Crowdfunding, which stems from crowdsourcing, is best described as a platform which allows artists, philanthropists, and entrepreneurs to display their ideas by using the power of social media and video outlets (such as YouTube) to pitch their projects to a large pool of micro-investors. As crowdfunding continues to develop and new platforms sprout about, entrepreneurs will have more and more avenues to expose and market their business ideas. When planning your crowdfunding campaign, do some research on which site best fits your project needs. There are a handful of crowdfunding sites out there, most of which vary in how they operate.
To get you started, here’s a list of the 5 best crowdfunding sites:
Kickstarter is geared toward artists and designers in the creative field. Launched in 2009, Kickstarter has seen more than 20,000 creative projects successfully funded. Kickstarter structures its campaigns on an “all-or-nothing” basis: meaning if your campaign doesn’t reach its funding goal, your project doesn’t get any funding and your investors won’t be charged. You then weep in frustration and go back to the drawing board.
RocketHub welcomes artists, scientists, entrepreneurs, and philanthropists in the creative industry. RocketHub was launched in January 2010 and puts forth an “All & More” funding model. The “All” means you get to keep all the funds raised throughout your campaign. The “More” means you’re able to set additional perks if your project goal is reached or is exceeded.
Founded in 2010, AngelList is comprised of a community of startups and investors. An important difference totake note of is that AngelList is focused on working only with reputable investors and serious startups, versus your average Joe funding some garage band to go on tour. This hybrid social network is setting out to streamline the fundraising process and to facilitate new business introductions.
Indiegogo has been around since 2008 and markets itself as an international crowdfunding platform. Indiegogo is very flexible and allows projects of almost any kind, just as long as they aren’t illegal. Much like Google, the “global exposure” feature promotes campaigns based on a unique, merit-based algorithm that tracks the level of activity for each campaign based on how much is shared and updated.
Similar to Indiegogo, Invested.in is a platform for individuals to raise money for a wide range of projects. Invested.in heavily relies on social media to leverage support and reach fundraising goals. Invested.in is built to scale, offers hosting, and is fully customizable, which means you control the look, feel, and branding of your campaign.
To learn more about starting and planning your crowdfunding campaign, check out our article: Starting Your Business with Crowdfunding.
As an entrepreneur or small business owner, crowdfunding is an alternative, low-cost approach to building awareness for your product, while raising the needed funds to grow your business. Accompanying your crowdfunding campaign should be a well-put-together video that explains your product, service, or company objective. Creating an engaging video for the intent of going viral will benefit not only your crowdfunding campaign, but your overall marketing efforts. For more on viral marketing campaigns, read our article on viral marketing campaigns.