Platforms like KickStarter and IndieGoGo help people raise money for a project or for a cause through crowdfunding. You can leverage these platforms to raise money for your business by offering a (future) product or a token reward such as a “Thank You” card, t-shirt or handmade candle. If you are not raising a huge amount of money (e.g. – < $5,000), this can be a viable option with few strings attached. However, in order to raise funds successfully, you have to be very good at marketing and present your product/business in a way that resonates with people.
Nav is the ONLY source for both personal and business credit score access, with advice on how to build your business credit to get funding, and save money. Get Started For Free
What You Need to Know About Reward Crowdfunding
|You don’t pay your investors — you reward them with whatever you feel is appropriate||If you don’t raise at least your goal amount of money, you may not raise get any of the funds|
|Great way to validate your product with future customers||Takes a lot of preparation + marketing effort|
|No need for collateral||Most charge a small closing fee|
Best Candidates for Reward Crowdfunding:
- Businesses with a compelling B2C product
- Businesses with a great business pitch
- Businesses looking to validate their business idea
It’s a great option if you have a compelling product/project and know how to market it. Keep in mind that the time you will spend coming up with a great campaign is probably going to be quite a bit more than the time you’d spend on a loan application or investor presentation.
Nav's MatchFactor technology is the only place that instantly shows your approval odds for business loans and credit cards before you apply. See my match scores for free.