What is crowdfunding?

Crowdfunding is a method of raising money through a collective effort of friends, family, customers, and individual investors. This approach engages primarily social media and crowdfunding platforms and leverages their networks for greater reach and exposure.

Why crowdfunding?

Crowdfunding gives you, the entrepreneur, a single platform to build, showcase, and share your pitch resources. This approach is completely different from the traditional model.

With crowdfunding, it’s easier for you to get your opportunity in front of even more interested parties and give them more ways to help grow your business, from investing thousands in exchange for equity to contributing $20 in exchange for a first-run product or other reward.

Benefits of Crowdfunding

• Reach
• Presentation
• PR & Marketing
• Validation of Concept
• Efficiency

For more information about the benefits click here.

Types of Crowdfunding

Donation-based: Initiatives include fundraising for disaster relief, charities, nonprofits, and medical bills.

Rewards-based: Involves individuals contributing to your business in exchange for a “reward,” typically a form of the product or service your company offers.

Equity-based: Equity-based crowdfunding allows contributors to become part-owners of your company by trading capital for equity shares.

Courtesy of Fundable.com

Fiscal Sponsorship

Crowdfunding Sites

GoFundMe – One of the #1 fundraising and crowdfunding sites. This site has donor protection guarantee, simple setup, 0% platform fee, mobile app, social reach, and 24/7 expert advice.

Fundly – Fundly is fast, easy, and has no raise requirements. 25% of all their donations come from social sources. This site allows you to customize your donation page and access to their mobile app.

Kickstarter is another big name for crowdfunding. Kickstarter is known for helping tech and creative entrepreneurs fund their projects. You do not get your funds unless you have reached your goal campaign. There is a 3- 5% processing fee per transaction.

Indiegogo is typically used for tech innovations, creative works, and community projects. Works similar to Kickstarter, except the all or nothing fundraising model isn’t used.

Patreon – Patreon is popular among digital creatives. As opposed to you collecting one-off campaign donations, you have a subscription model where patrons regularly contribute a set amount of money every month or per creation. The site allows artists to form relationships with their fans, and creators can even deliver exclusive content to their Patreon subscribers as an incentive to continue funding them. this model will work if you share your work on your personal platform.

ArtistShare, launched in 2001, connects creative artists with fans in order to share the creative process and fund the creation of new artistic works.

Other Resources

• Crowdfunding in the Arts: How to Add This Essential Tool to Your Fundraising Mix. Dana Ostomel, the founder and Chief Gifting Officer of crowdfunding platform DepositAGift.com, discusses best practices to prepare, create, launch and market a campaign successfully.
• Fundable help companies get funded by building the largest business crowdfunding platform dedicated exclusively to helping companies raise money. They also have great information about how to get started and why you should.