What is Crowdfunding?
Crowdfunding is the strategy for business people, innovative masterminds, and non-benefits to get funding. In its essential frame, it is the pooling together of little measures of cash from a gathering of a group that shares your passion and that you communicate with web-based utilizing web-based life. Everybody can utilize it without setting off to the banks or VCs, and the probability of getting subsidized is altogether higher.
In March 2014 was a major month for crowdfunding and for crowdfunded products. In the start of the month, Kickstarter reported its one $1 billionth vow. 5.7 million individuals have sponsored around 130,000 imaginative activities on Kickstarter.
What are the types of crowdfunding?
There are four basic types of crowdfunding: Donation, Rewards, Debt and Equity.
Donation- The Donor gets nothing in return from potentially an expense receipt. Any donor who relates to the cause is welcome to donate towards the campaign. No limit of amount donation. Top stages GoFundMe, Fundly, DonorsChoose for Teachers, and Causes for raising assets and making petitions.
Rewards- In reward-based crowdfunding, the donors who believe and donate to the cause are given a small reward in exchange for their contribution towards the cause. The top stages incorporate Kickstarter, Indiegogo, and RocketHub.
Debt– In simple terms, debt-based crowdfunding is the practice of raising funds from individuals, in return for interest. The person who supports your project by putting his money is known as an investor. Debt-based crowdfunding is also called as “Lending Crowdfunding .”
Equity- Equity crowdfunding is the process where people invest in an early-stage unlisted company in exchange for shares in that company. The top stages incorporate CircleUp, Fundable, and MicroVentures.
The advantages of crowdfunding over other sources of funding can include:
- a customer base that believes in your product
- the opportunity for you to interact directly with your customers, who are also your investors
- the opportunity to get feedback from your customers while you develop and test your product
- free word-of-mouth marketing for your product through your backers
- instead of providing a share to investors, you still own your business in full
- lower commitment and risk (if you don’t reach your goal, you don’t have to commit).
Crowdfunding also has disadvantages. These can include:
- no guarantee that you will reach your funding goal in the set time
- the need to campaign and present your product well to encourage people to fund it
- the need to spend time interacting with your backers and providing them with updates on your product and business development
- providing rewards to your backers to encourage donations
- the need to deliver the product that has been promised to your backers
- having to compete with other businesses seeking crowdfunding for their ideas and products.
Which type of crowdfunding is right for me?
For people hoping to subsidize a project, Reward and Equity-based are extraordinary alternatives. You can likewise utilize Donation on the off opportunity that you are supporting a non-benefit, cause, network, or life venture
For non-benefits, Donation is perfect however compensates is an alternative likewise and may additionally draw in funders.
For private companies, assorted types are accessible, however, rewards, obligation, and value (when legitimate) are more perfect. Likewise, think about this
On the off chance that your business is producing $1M+ in income and expects high direction development, the value could be a great choice
On the off chance that you are a physical business with unfaltering pay and strong accounts, obligation might be perfect.
When should I start my campaign?
It is ideal to start a campaign after you’ve created a following of people. These people may come from your personal contact list, social media networks, current customers and any other forum where you are communicating and engaging with people regularly.
What is Kickstarter?
Kickstarter is a crowdfunding website that generates funds for individuals or companies who have come up with a prototype or a working model of any product or service and want funds to make the product reach the commercial market. The funds help the innovator or the company to convert the prototype into an actual product that is available in the market.
It is always necessary for an innovator or person with a great prototype or an idea to reach the mass in form of a physical product or service and ensure that the concept grows from lab scale to position where it reaches the doorstep of the Customer. An idea is of no use if it cannot be materialized.
History of Kickstarter
Kickstarter launched its service in the year 2009 based out of Brooklyn, New York, US by Perry Chen, Yancey Strickler, and Charles Adler. The Company’s Mission Statement Says “ Help bring a creative project to life”. The company with its concept received numerous awards including an award of “Best Website” and Best Invention of the year 2010 by reputed magazines. Its popularity soared and it expanded to the UK in 2012, Canada, Australia and New Zealand in 2013. It thereafter expanded to Denmark, Ireland, Norway, and Sweden in 2014. With an intention to grow further it expanded to Germany, France, Spain, Austria, Belgium, Italy, Luxembourg and Switzerland in 2015, Singapore, Hongkong, Mexico in 2016 and finally Japan in 2017.
The raised funds out of a campaign or a project on Kickstarter can be in any native currency. Currently, the company offers US Dollar, Canadian Dollar, Australian Dollar, Euro, Swiss Franc, Danish Krone, Pound Sterling, Hongkong Dollar, Japanese Yen, Mexican Peso, Norwegian Krone, New Zealand Dollar, Swedish Krona and Singapore Dollar. With this currency, the creator can easily raise funds without any conversion factor and thereby saving money for the fundraiser.
If you’re willing to start your own crowdfunding business – you should go with Kickstarter clone which has customized features to let you roll with your own crowdfunding business.
How Do I start to build my Own Crowdfunding Platform?
If you are into the startup ecosystem, you already know the role of crowdfunding. Crowdfunding has always been a hot topic, and the recent growth of fundraising platforms has given it a whole new meaning. Platforms such as Kickstarter and Indiegogo are the choices for startups to get funded.
Crowdfunding websites will become more social in time and it is the fastest & easiest way to get fundraising for a start-up business. Tyro will seek for the best crowdfunding software that will help to boost the funding for projects. The scope for the fundraiser is increasing daily and it is a most effective way to get funded for projects, make bonds with investors and can be billionaires if the idea is powerful and fruitful.