Being unable to find investors to finance your business endeavor is not an excuse anymore. Entrepreneurs are collecting money from crowd funding websites like Kickstarter and Chipin, which offer accessible and low- to no-cost entry platforms for funding projects, expanding businesses and launching startups.
Crowd funding, or crowd financing, is the collective effort of individuals who network and pool their resources, usually via the Internet, to support efforts initiated by other people or organizations. These communities are used to support a wide variety of activities, including disaster relief, citizen journalism, support of artists, and yes — startups and small businesses.
“These types of communities have made themselves quite valuable in today’s ‘Mom and Pop’ market,” says John Cerasani in his YFS Magazine article, 5 Ways to Start a Small Business Without Capital. “With a short profile video describing your business idea and fun perks for potential donors, entrepreneurs have a platform to raise funds without giving up control or equity in their ventures.”
Kickstarter, a crowd funding website for creative projects, has funded a diverse array of endeavors, ranging from indie films, music and comics to journalism, video games, and food-related projects. The platform also showcases entrepreneurs seeking financial support to help expand their small business.
Yancy Strickler, Co-Founder of KickStarter.com, tells how people are funding their entrepreneurial endeavors using his website.
In one case, San Francisco-based entrepreneurs Rachel and Greg Malsin launched Project Juice as a personal mission on Kickstarter to “nourish” the Bay Area community with their fresh, nutrient-dense fruit and vegetable juices. They successfully raised $15,579 (the original goal was $15,000) to help remodel their kitchen to meet the standards of city compliance, purchase industrial refrigeration units, launch a user-friendly website, and obtain license and permit fees.
Apparently, Kickstarter’s crowd funding platform is an idea whose time has come. According to its website, about $347 million has been raised for projects so far (though much less has been raised for successful projects).
ChipIn is another Web-based crowd funding service that simplifies the process of collecting money from groups of people. Once you create an event with ChipIn, the site will process and track all payments that contributors “chip in” via PayPal. You can also monitor events simply by logging into your account and viewing your dashboard.
As people donate to your event, you’ll be able to track the progress of your event using the ChipIn widget, which can be inserted on blogs, profiles, and websites.
Crowd funding is a financing option for prospective entrepreneurs who are hoping to develop an idea into a business, and those who might already have a business going but need financing to take it to the next level.
Here are five tips when considering crowd funding for your next project.
- Crowd funding: A guide for SMEs (xlntelecom.co.uk)
- Crowd Funding Survey Defines Starting Point For Small Businesses (prweb.com)
- What Happens to Your Money When Kickstarter Fails? [VIDEO] (mashable.com)