Crowdfunding is a low cost, high effort way to engage your community and raise awareness for your product, all while raising capital for your business.
Crowdfunding websites allow you to offer rewards in exchange for funding. A reward can be anything from a virtual high-five to a promised amount of your (future) product. The most successful campaigns are generally the most creative – they are the ones that market and present a product/business in a way that resonates with people.
Below we’ve highlighted 5 crowdfunding resources that allow anyone to back your business – no attribution required. These provide a way to marketing your product, as well as allow friends and family to contribute to your idea in an easy, affordable way.
Kickstarter is famous for “kick starting” the crowdfunding movement. This is a project-based crowdfunding platform, meaning it’s designed to fund projects with clear milestones. This may not necessarily be the best fit for business fundraising but can still be powerful if you want to fund a specific project. To receive any of your fundraised amount, your campaign must be fully funded. The site receives a ton of traffic from potential backers, just make sure your project stands out amongst the crowd!
Here’s one wildly successful [Kickstarter campaign]( https://www.kickstarter.com/projects/2054052511/tool-pen-makes-everything-beautiful?ref=popular) that is allowing backers to choose which style of the product they prefer as the reward at each pledged amount. They feature an inspiring, professional video on their funding page as well.
Indegogo is the original crowdfunding website. Like Kickstarter and other crowdfunding sites, they charge a small percentage of the total raised amount (7% for a fully funded campaign, 12% otherwise). What’s great about IndieGoGo is that you can directly fundraise for your small business on their platform.
This Indegogo campaign tells the touching story of a passionate girl, Ashana, who needed help paying for college. Her exceptional personality shines through in her video allowing funders to feel connected with her.
Ashana’s campaign was for a personal fund, but here’s a business campaign for Wheely’s cafe. Wheely’s is a cafe-on-wheels that rewarded their earliest contributors with a Wheely’s Cafe at 40% off.
3. Kiva Zip:
Kiva Zip is unique because they offer a 0% interest rate loan to businesses. That’s right: 0%. Lenders who sign up for Kiva Zip are philanthropic minded and willing to offer capital at no added cost just to promote the small business community. You can get a $5,000 – $10,000 first loan through the platform after you find a trustee to endorse you. Apply online directly and Kiva Zip will help find a local trustee for you. The trustee will walk you through the process, understand your personal and business financial situation and decide if they want to approve you on the platform. Once you are approved, they also help you develop a campaign and crowd fund on their website.
Lynn’s personal story on her campaign page resonates with lenders by sharing her journey of hard work and the success it’s led her to today.
Although GoFundMe has a dedicated small business fundraising section, most of their lenders are looking to invest in disaster relief or education. Like Kickstarter and Indegogo, they charge around 7% of the raised amount, but they have an added $0.30 processing fee per transaction. If you’re considering GoFundMe, it’s best to tell your personal story in your campaign rather than just highlighting your business’ story.
After seeing how adorable this pickle entrepreneur is, you’ll have trouble resisting the urge to contribute to his campaign – even if you don’t like pickles!
Crowdfunding for FOOD! Credibles allows customers to “prepay” for your food product, giving you more cash flow. Another great aspect of Credibles is their [partnership with Whole Foods]( http://www.crowdfundinsider.com/2014/07/44001-whole-foods-partners-credibles-support-local-food/); who now accepts Credibles as a payment option at some Whole Foods locations. If you have a sustainable food business, Credibles could be great for you.
A lot of Credibles campaign pages are short and to the point, but Danielle’s NuttZo page features a video allowing you to get to know Danielle and her family, a great way to allow donors to connect with the faces behind the business.
Crowdfunding websites can be great for small businesses looking to raise a small amount of capital (< $10,000) , who can wait 1-3 months for funding, and are looking to market their product to the community. If you have a business idea that can generate support from campaign backers, try testing it out on one of these five resources.
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