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.
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.
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.
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.
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.
Many first-time entrepreneurs, get very excited about their business ideas, and talk other people's ears off about them. They go on and on about how great their ideas are, but in all that excitement they lose clarity. There is an art to being brisk and clear in your explanations of what your business is so that people can quickly understand what you do, and decide whether they can help you. To make your business pitches more clear, take a look at the business pitch tutorial which should aid you in your fundraising efforts.
When you first start your business, even though you want to raise money and get donations sooner rather than later, sometimes your idea is just too early to raise money. To make your idea more mature, you must go through proper business planning, and begin to execute your idea in order to bring it to life and get traction for your business. You can begin brining your idea to life by creating a website for your business, and starting to promote it.
The Internet is full of opportunities to make money. Here is a video tutorial with 50 unique ways to make money online.
Here is an example of how to make money by writing books and selling them on the Kindle and on Amazon. You can put the proceeds of the sales directly towards your business.
Events can be a great way to get donations that you can put towards your business. There are a couple of different types of events that you can do. For example, you can run one-time events or a regular event series. The goal behind these events is to get people to learn about your business and become clients, and also to either donate money to your business or to pay for entrance. You can use the event ticket fees to go towards your business. To learn more about it, here is my event marketing tutorial.
If you don't have any money to start your business, and you can't get donations for it, that doesn't have to stop you. The process of starting a business without any money is called bootstrapping a business. Most companies can't get enough money to get started so bootstrapping your business is a very necessary option to consider.
If you want to plan out your strategy to raise money with donations or other means, I can help you do that by coaching you through the process and creating a good strategy for you that you can execute. Check out this page where I explain how you can hire a business coach. On that page I talk about my current promotion where I can start the first 15 minute session for just $5 so you can try it out to see if you find my business coaching helpful.
One resource is Sba.gov. Another site that might be helpful for crowdfunding is KickStarter. Other crowdfunding sites are IndieGoGo and GoFundMe. Another thing you can do is consider investing to help you save to fund your business. It is risky, but it is a possibility. Check out this article on investing as an option to fund your business.
Article by Alex Genadinik