Despite being one of the most well-known platforms for crowdsourcing, Kickstarter isn’t necessarily guaranteed: There are dozens of projects that simply didn’t get enough traction to receive funding. So, what other options are there? Here are 7 websites that can help you find the funding you require, whether you’re seeking for a little investment to kick-start your business or a huge round of funding to take it to the next level.
Why is crowdfunding a viable business funding option?
One of the biggest challenges for most businesses is finding funding. It can be difficult to know where to start if a bank loan won’t meet your needs and you don’t have any links to investors. Online crowdfunding, which involves getting smaller sums of money from numerous backers, has grown to be a popular way for businesses to get around this problem because it enables them to contact many possible investors at once.
Kickstarter alternatives for crowdfunding:
Here are several alternatives to Kickstarter that you may utilize to find a wide group of investors to fund your firm.
A U.K.-based equity crowdfunding platform called Crowdfunder makes it simple for companies to raise money from its network of 1 million investors. The website enables entrepreneurs to raise capital using stock. There is a 5 percent standard project platform fee and a transaction fee of 2.4 percent + $0.25 + value-added tax.
EquityNet is a business crowdfunding platform that enables entrepreneurs to share their profiles and company plans with a network of more than 20,000 angel investors, venture capitalists, and business supporters. Startups interested in equity investors can sign up for EquityNet. Utilize EquityNet’s proprietary business plan and analysis tools to streamline your preparation and connect with potential investors.
Fundable, a platform that enables entrepreneurs to raise money from investors, clients, and friends, was developed by a group of startup founders who are familiar with the difficulties of obtaining finance. Companies looking for funding can register on the website, specify their objectives and incentives, and publicize their campaign.
Fundable gives businesses the option to conduct equity and reward-based fundraising. If a company’s fundraising goal is less than $50,000, it may give rewards through reward fundraising. Contrarily, equity fundraising is for businesses seeking to raise a greater sum of money and calls for a minimum investment of $1,000 from backers.
The most well-known prospective substitute for Kickstarter is probably Indiegogo. Over the course of its operations, the site has amassed over $1 billion in total funding from over 11 million unique contributors.
You can engage with qualified businesses that Indiegogo has screened to manage the start of your campaign and the subsequent product rollout. Additionally, Indiegogo is notorious for approving crowdfunding campaigns that Kickstarter is said to have prohibited.
Since 2009, MicroVentures has assisted businesses, such as Facebook, in obtaining funding from accredited and unaccredited investors. The website primarily targets companies looking to finance $150,000 to $1 million in the software, mobile, and green-tech sectors. Before choosing a firm to be highlighted on its website, MicroVentures considers the applicant’s idea, team, traction, market size, and other aspects. The company’s website states that the fundraising procedure often takes six weeks after that.
Through per-creation models, you may use Patreon to finance your projects. Through this concept, potential investors will provide you money for a certain project. Although Patreon describes itself as a membership platform rather than a crowdfunding site, this option is essentially crowdfunding.
As a result, if you regularly publish material, you may use Patreon to finance your business through patron payments. Your consumers will have exclusive access to your content, and you will receive monthly subscription payments for it. They’ll feel as though they have a special bond with you, and you’ll have a ready-made foundation of devoted, repeat clients in addition to extra money.
Shark Tank investor Kevin “Mr. Wonderful” O’Leary suggests using StartEngine to carry out a legal crowdfunding campaign. You can crowdfund up to $5 million annually using this platform. The launch of your campaign will take four to six weeks and cost little to nothing. After your campaign is over, StartEngine also provides trade opportunities for you to take advantage of.
Crowdfunding dos and don’ts
Here are some things to do and avoid doing as you start and run your crowdfunding campaign.
- Do carefully consider each platform. Would you rather base your campaign on equity funding or reward-based funding? Your answer to this question, among others, will eliminate certain crowdfunding platforms from consideration. Carefully consider what each platform offers before choosing the right one for your campaign.
- Do prioritize transparency and share lots of information. Some people might find meaning in contributing to crowdfunding campaigns but have limited budgets. This is a big reason to be fully transparent in your crowdfunding campaign and share plenty of persuasive information about your offerings. The more forthright you are in all your materials; the more people will feel an emotional connection and invest in your opportunity over others.
- Do prepare for potential liability. You should speak with an attorney and obtain business and general liability insurance before you launch your campaign. Business liability insurance can protect your personal assets if a campaign contributor sues you. General liability insurance can offer additional protection if your crowdfunding campaign leads to property damage or personal or advertising injuries. These are great backups if your product launch goes awry.
- Don’t plan for a fully funded campaign. More often than not, you won’t get all the money you’re hoping for from your crowdfunding campaign. Even if you do, though, that money might cover just one project or business phase. Future initiatives or growth periods might require more money than possible from one campaign. You can always run another crowdfunding campaign when these moments arise.
- Don’t overlook expenses and taxes. Typically, the income you raise from your crowdfunding campaign counts as business income. This makes it taxable in exactly the same way as all your other revenue. On top of this expense, you’ll likely have to pay a fee to use whichever platform you decide is the best fit. Sure, the money you bring in will likely cover these costs, but you might also want to increase your fundraising goal.
- Don’t just post your campaign and walk away. Just as with any other content you create, you’ll need to promote and market your crowdfunding campaign. For better marketing outcomes, your crowdfunding campaign should tell a story rather than just stating why you’re seeking money. From there, you should leverage your social media presence, email marketing efforts and other channels to spread your campaign wide and far.
With crowdfunding, you have options
While Kickstarter might be the go-to platform for all things crowdfunding, you certainly have other choices. You should take into account the many types of crowdfunding that are offered on each site to choose which one is best for your company. Making the most of a crowdfunding campaign then entails largely doing the same actions you would typically take to market and promote your company. Success isn’t guaranteed, but it can definitely be increased with effort and care.
Contact MCDA CCG, Inc today with any questions about funding your business!