What is crowdfunding?
Crowdfunding was started primarily by Kickstarter.com in 2009. Crowdfunding is a method of funding projects by means of using huge crowds of people donating. This is done mainly by the internet and platforms designed to collect money. People have done crowdfunding for disaster relief but we will talk about it in a business related way. More about crowdfunding on Wikipedia.
Legal limits to crowdfunding
There have been laws setup to prevent solicitation of public funding for equity so these crowdfunding platforms get around it by offering an item of value in return for the different tiers of their donations. A lot of times the rewards end up being a pre-order while lower tiers offer things like a post card or their name on something. Sometimes they just offer a thanks in email form.
Some reasons for these laws can be related to how stocks are setup for corporations and to prevent all sorts of disasters from uncertified investors investing and then getting nothing. Many times the crowdfunded projects don’t actually send out the rewards they promised for various reasons. Sometimes because they aren’t good people but a lot of times it is because of complications with the project. The folks being crowdfunded are not legally obligated to send out the rewards but they are supposed to by something like a good faith agreement.
Legal changes to the equity situation
Changes to this landscape have been in the works. In early 2013 the first part of the JOBS Act came through that would allow equity to be exchanged for the money given to these crowdfunding projects. It will not be in full effect until later in 2013 when they actually figure out what they want to do with the whole thing. As with most governmental processes, this may take longer than the dates they set forth. We will see. More about the JOBS Act on Wikipedia.
If you have trouble finding the crowdfunding platform for your specific needs, I recommend you read 22 Crowdfunding Sites (and How To Choose Yours!) by Inc.com
Equity programs available when JOBS Act is completely passed
- Rocket Hub
- Fund Anything
- Crowd Supply
- Jumpstart City
- Rock The Post
- Fund Our Park (Fund Our Community)
- Pledge Music – Music
- Sell A Band – Music
- Emphasis (Emphas.is)
- Microryza – Scientific research
- AppBackr– Apps
- AppsFunder – Apps
- Go Fund Me
- Start Some Good
- OffBeatr – XXX related campaigns
- Patreon – Music, blogs, and other multi-part content projects.
Crowdfunding can be a hard thing to do and to maximize your chances of success we are listing a bunch of crowdfunding advice. There are websites, articles, etc.
Your Own Crowdfunding Campaign Website
There are ways to run your own crowdfunding campaign without the use of the platforms listed above. You can get a WordPress template that is designed for it.
Free Crowdfunding Exposure
Places to post your crowdfunding campaign to for free exposure:
Crowdfunding ToolThere are general trends and a tool has been developed to find out if a Kickstarter campaign is likely to pass or fail.
Crowdfunded Product Stores
There has been a new wave of stores that are popping up that are to sell the items you see on Kickstarter and other funding platforms.