An Introduction to Crowd Funding
We have two of the best resources for you on this subject. One is mine the Crowd Funding magazine and the other is the Crowd Funding bible. Our magazine shows how you can use them to promote business ideas. The QUBI didn’t take off due to competition releasing the Xiaomi MI BOX Android 6.0 Smart Set-top TV Box Quad Core MI. However you can see the process.
Want to start your own business or have a great idea for tomorrow’s next million-dollar invention? Congratulations – crowdfunding gives you the power to bring entire businesses and better widgets to life overnight.
But what is crowdfunding exactly, how does it compare to crowdsourcing, and (more importantly) how can you use it to provide venture capital for any project or startup?
In these books you’ll find some handy hints, tips and how-to guides, as well as commentary from leading experts and crowdfunding veterans, to harnessing the ultimate in people power.
Following is a detailed overview of guiding business principles and case studies that you, as a modern entrepreneur, can utilize to create your own successful crowdfunding campaign.
Note that while many examples here may come from the video games and interactive entertainment industry (among the fields that have benefited most financially from this practice), they’re also applicable to many other consumer-facing sectors, including consumer electronics, periodicals, books, film, television, fashion and even special events and community projects.
The good news for aspiring inventors and startups: With the right project and assets to convey your vision to potential backers, and a detailed understanding of how to engage with today’s audiences, anyone can make their dreams a reality.
Better yet, you too can participate in this exciting new means of funding, and launch nearly any promising new project or business.
Ready to dive in headfirst and begin raising attention and capital for your latest and greatest ideas? Let’s begin by taking a deeper look at what crowdfunding means, and how exactly the field works. Watch the below video online Youtube.
What is Crowdfunding?
Simply put, crowdfunding is the process of asking the general public for donations that provide startup capital for new ventures.
Using the technique, entrepreneurs and small busi¬ness owners can bypass venture capitalists and angel investors entirely and instead pitch ideas straight to everyday Internet users, who provide financial backing. (At the same time, you will also gain early validation of project concepts and the projected scope of target markets.)
Using services like Kickstarter and IndieGogo, creators essentially build web pages that host information, photos and promotional videos on products, projects or services they’re looking to get funded. Viewers are then offered special rewards in exchange for pledges that support their efforts.
Rather than equity or a share of profits though, benefits often take the form of exclusive merchandise, advance access to new releases, or more personal incentives.
There are three basic models provided for – some sites offer a choice between them:
- All or Nothing (AoN) – When the fund-raising period is over, pledged money is only collected from the contributors if the fundraising goal is met. If the goal is not met, no money is collected.
- Keep it All (KiA) – Whether the project goal is met or not, all of the funds collected (minus commission) are handed over to the entrepreneur. If he or she has insufficient funds to meet the objectives, then it is up to the recipient to refund them to the contributors.
- Bounty – The funds collected so far are given to anyone who completes the project.
If using a mobile to view the table below rotate for a better view.
All links valid at time of creating this document.
|ArtistShare||KiA||Musicians||Has own record label.|
|Appsplit||KiA or AoN||Technology||USA||Has an app or app idea.|
|Bountysource||Bounty or AoN||Open source software||Bounties are attached to github issues. Anyone can collect the bounty by submitting a pull request that resolves the issue.|
|Yomken.com||AoN||Low-tech Innovations||Egypt||First Arabic non-profit open-innovation and crowdfunding platform.|
|Catincan||AoN||Open source software||Existing project developers put features up for funding that will be integrated into main branch.|
|CrowdFundEDU||KiA||Education crowdfunding for college tuition, K-12 fundraisers, books and supplies, activities, sports equipment, student loan debt|
|DonorsChoose||AoN||Education crowdfunding for school supplies|
|First Funder||KiA or AoN||Community based|
|Fondomat||KiA||Entrepreneurs, small businesses, non-profits, accelerators, incubators, universities, SBDCs, community programs||Czech Republic||First partner-based platform. Sources all campaigns from community partners.|
|Fundable||AoN||Startup businesses||Specializes in obtaining pre-seed funding for startup businesses.|
|Fundageek||KiA||Inventors, research, education, software, community support||Additional project promotion services are available|
|Funding4Learning||KiA or AoN||Educational projects|
|FundRazr||KiA||Personal, charitable, entrepreneurial, and political causes||Canada||Available as an app for a Facebook page.|
|Fundly||KiA||Personal, charitable, and political causes||US||Available as an app for a Facebook page.|
|GiveForward||KiA||Online fundraising website to raise money for medical expenses.||US||Provides personal fundraising coaches.|
|GoFundMe||KiA||Helping people after
accidents and illnesses
|IAmScientist||AoN||Academic research||Also provides social network for academic collaboration|
|Indiegogo||KiA or AoN||Allows a broad range of projects||One of the top sites|
|InvestedIn||KiA or AoN||Open to any project anywhere in the world||Also offers a white label crowdfunding platform|
|Kickstarter||AoN||Creative projects||United States and United Kingdom||Highest funded projects to date|
|Microryza||AoN||Fund scientific research||No tangible awards are given for backing, only personal satisfaction|
|Myfreeimplants||AoN||Cosmetic surgery||Focused on breast augmentations. International|
|Neighbor.ly||KiA or AoN||Civic projects||Specializes in raising local match for securing federal and state grants|
|Offbeatr||AoN||Pornography||Projects must first get enough votes from users before they are open for funding|
|Peoplefund.it||AoN||Attached to Hugh Fearnley-Whittingstall|
|Rally.org||KiA||Medical, educational, charitable, creative, entrepreneurial, and political causes||USA and Germany|
|Rock The Post||AoN||Entrepreneurs and small businesses|
|YouCaring||KiA||Helping people with
medical issues and life changing causes
|Weeve||KiA||Nonprofits||Site operates “freemium” model without transaction fees|
|ZenFunder||AoN||Civic organizations – government and schools||USA||Created by CitySourced, maker of civic engagement software.|
Crowd funding can be used to raise capital (equity) or borrow money. While organized informally, they typically involve large numbers of small investors or lenders:
- Equity – Investors receive equity in the company or entrepreneur that is raising funds.
- Property – Investors receive interests in the property from an owner who is raising funds.
- Loan – The entrepreneur or company borrows money and must repay it (typically, with interest).
- Other – There are a number of other schemes in use which are generally unique to particular services.
|Abundance Generation||Debt||Community renewable energy projects||UK|
|AngelList||Equity, debt||Start-ups||US||Currently serves accredited investors|
|BankToTheFuture||Equity, debt, awards||small businesses and new start-ups||UK|
|Bolstr||Revenue share||Small businesses||US||Able to operate now, pre-JOBS Act|
|CircleUp||Equity||Consumer products and retail||US||Currently serves accredited investors|
|CrowdCube||Equity and rewards||start-ups, small businesses, growing businesses||UK|
|Fundable||Equity||Seed stage businesses|
|FundedByMe||Equity and rewards||Entrepreneurs||Sweden and Finland|
|Funding Circle||Loan||Small businesses||UK|
|Innovestment GmbH||Equity auctions||Germany|
|Kopernik||Other||3rd world issues|
|Mosaic Inc.||Solar Debt||Solar projects, available to general public in CA/NY and all US accrediteds||US||open, pre-JOBS Act|
|SecondMarket||Equity, debt||Late stage start-ups and privately held companiesat a pre-IPO or pre-acquisition stage|
|Seedrs||Equity||Seed-stage businesses, Investments from £10+||UK|
|Seedups||Equity||Early stage tech-startups||UK, Ireland and USA|
|StartupValley||Equity||Technology start-ups and businesses|
|Symbid||Equity, perks||Start ups and business ideas, entrepreneurs, small businesses, accelerators, incubators, crowd investors, angel investors||Netherlands||Responsible for one third of the Dutch crowdfunding market in 2012|
|Unbound||perks||Books||UK||Acts as both a crowdfunding platform and a publisher. Launched Terry Jones‘ Evil Machines, the first book to be financed by crowd funding.|
|Upstart||Loan||Loans for recent college graduates|