Crowdfunding is a very new type of funding which takes advantage of the power of the Internet and allows the many people to donate to a project in which they believe. That is great for the entrepreneur starting the project as it gives them some free money with nearly no strings attached.
This is a very new type of funding. It is a phenomenon that is rapidly growing and many projects have already raised tens of thousands of dollars via this method of funding. The leader in the space is KickStarter.com
Raising Donations With Kickstarter
A site called kickstarter.com is the leader in this space. Originally they only allowed art projects to get funded, but now they are allowing a broader range of projects to be posted there. Their rules do frequently change to accommodate their growth, so for current rules, and to see if you are eligible to apply, check their site.
Raising Donations With IndieGogo
The second biggest crowdfunding site is indiegogo.com which is essentially a slightly smaller version of kickstarter. So if for some reason kickstarter does not work for you, you can possibly use indiegogo.
Specialized Crowdfunding Sites
There are also many crowdfunding sites that specialize in funding various niches. For example, appstori.com specializes in funding mobile apps. Science projects can get funding via petridish.org. There are many such sites popping up (and sometimes closing down) since this is a very new space, so if you are interested in crowdfunding, search for the kind of crowdfunding site that may work best for your type of project.
Some crowdfunding sites are more effective than others at raising money, so you have to judge what is right for you based on the nature of your project, and your funding needs.
If you do want to give it a try, you need to do some research about how crowdfunding really works.
How CrowdFunding Really Works
The way these sites grow is by having the entrepreneur in charge of the project invite friends to donate to the project. The sites can help new people find projects to which they can donate, but the entrepreneur has to put in a big effort promoting their project and trying to find people to donate to the project. Typically the crowdfunding sites take 4% of the total money raised.
Other Ways To Raise Money
If you are looking for more fundraising ideas and maybe some non-traditional ways to raise money in case the traditional ways to raise money do not work for you, take a look at our creative fundraising ideas article for a bit of inspiration and actionable fundraising techniques you can try.
Further Business Resources
For more business-starting resources, please take a look at our business planning mobile apps. Here is the iOS business plan app and here is the Android business plan app. Additionally, here is the iOS marketing app. And here is the Android marketing app. And here are our business apps on the Kindle. And here is an article where I give the argument that our Android apps are the best business apps on Android.
And please check out and subscribe to my YouTube channel where we cover many marketing topics.
Author: Alex Genadinik