So you have a great idea for a new start-up company or creative project but how do you raise the initial capital?
These days more and more people are turning to their communities for grants, loans and investment. It’s called crowd funding – basically going online to ask your community for start-up capital.
The most obvious advantage of crowd funding is a cheap source of capital to kick-start a new enterprise, but there are also many softer benefits. Crowd funding helps you build a community of avid supporters who are invested in your project both financially and emotionally. As this community wants your project to succeed, they will continue to champion it throughout its life.
Crowd funding is fast becoming a funding solution of choice for many entrepreneurs, musicians, filmmakers, designers, social innovators and small business owners.
Here are some of the crowd funding sites operating today:
- Profounder helps businesses raise money from their friends, family, communities and the general public. Each entrepreneur creates a fundraising profile, and sets-out their own investment terms based on sharing a portion of their revenues. Businesses can choose between a private offering to friends and family, or a public offering to the general public. The public offerings also have a social slant as once investors make back their original investment, any remaining revenues are donated to a nonprofit chosen by the business.
- Kickstarter is a funding platform for creative projects around the world. Unlike profounder supporters do not make an investment, but rather make pledges in return for tangible rewards such as products, benefits or experiences. It’s based on an all or nothing funding model – meaning if a project’s funding goal is not reached in the set timeframe, no money changes hands.
- Indiegogo is a funding raising platform for any project or idea whether creative, cause or entrepreneurial. It allows projects to raise money, offer perks or tax deductions and even pre-sell their work. Project creators keep the money whether or not the goal is reached.
- Fundbreak is an all or nothing platform for funding creative projects in return for rewards. It’s similar to Kickstarter but based in Australia.
Be sure to read the terms and conditions carefully before commiting any money.