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Crowdfunding: getting by with a little help from your friends

Fact: there are better ways to fund your project or start-up than applying for Dragon’s Den. Crowdfunding websites are on the rise, and with so many to choose from, finding just the right site for your project and making the leap into using it require a lot of research and confidence. So what are they, how do they work and why might you want to choose one- read on and find out!

 

What is crowdfunding?

Crowdfunding is when multiple companies and independent investors pool their money via donations over the internet. This is usually used for charitable organisations, start-up companies and artists/artistic projects, which are supported by a group of small investors or individual donations. Relying on lots of smaller donations to get your project on the road is not only a good way to get funding, but a brilliant way to publicise your endeavour and show how passionate and proactive you are about its success.

Who to go with

Even if you are unfamiliar with the term ‘crowdfunding’ you may have heard of some of the sites which use it. With so many different kinds out there, finding the best crowdfunding site for your project can make all the difference.

Kickstarter is one of the best known and more popular sites for group financing and donations, most likely because it focuses on a wide variety of artistic projects from film, design, and graphic novels to food and games. This site alone has financed over 41,000 projects to date, making it one of the most successful.

Indigogo is a site which draws the focus of funding to concepts similar to Kickstarter, but with an additional, strong focus for charitable organisations too. They boast a very simple, supportive set-up process, and even have integrated social media applications to help you promote your project.

GoFundMe is much more dedicated to personal donations and financing, such as holidays, vet bills, charitable causes and personal projects. This is a great site to get started on and get the word out about small collections and projects.

Sellaband is useful for musical types looking for a little more support in making their dream a reality. Another great example of what can be achieved with the power of crowdfunding, Sellaband is free to sign up to and does not take any of the rights to your material once uploaded. You will be given the tools to market your music and compile an impressive online showcase, and be supported all the while.

Things to remember


Who is your target market and which sites will they use?

If you’re a musician, using GoFundMe to launch your career wouldn’t be a very appropriate choice; similarly, Kickstarter wouldn’t be a great place to ask for honeymoon donations. Thinking about which sites your potential fans/clients/customers would be browsing is a good indicator of which kind of crowdfunding sites to base your work on.

Think about the fees

The majority of crowdfunding sites will ask for fees to get set up, so make sure you factor in all aspects of this before making your final choice.

Investor benefits

Each individual sites will give different benefits for donating, if you choose to add any of your own, it will definitely serve to strengthen your appeal to potential investors. Why not give special freebies or dedications to people who support you online to show your appreciation? It all helps!

Think about how you sell yourself

Remember, the whole point of using these sites is to convince people to believe in what you’re doing. Include as much detail as possible when writing up your project brief and outline so that anyone visiting your page knows what they’re investing in, and exactly what you and they will get out of it.

Promote yourself

Many of these crowdfunding sites will help you promote your project as part of the package, however it always helps to do a little extra yourself! Be sure to get the word out on your own Facebook, Twitter, Tumblr or Pinterest accounts so that anyone who knows you already can get behind the project if they want to.

If you’ve used a crowdfunding site for one of your projects, why not leave a comment below to help others decide if it’s the best option for them?

Comments

Omo
08 Jun 2013 11:28
Nice post
David Brookes
13 Jun 2013 22:51
Crowd funding is a great idea. Start up loans from Credit Unions are also a good way to get cash flow into your business.
TL
08 Dec 2015 19:25
never heard of crowdfunding, very interesting read.

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