I've compiled a little collection of crowdfunding websites and web applications that are designed to take the risk out of that creativity and innovation, allowing even the little guy to raise the moolah to operationalize that amazing idea.
Small amounts really do add up. Give one of these sites a try – both as a giver and if you are running a nonprofit consider how your organization might benefit from using some of these services. Post your profile with your project description on one of the crowdfunding websites to start your fundraising campaign and change the world.
KickStarter has received quite a bit of publicity recently for its efforts. Most notably the open source facebook alternative Diaspora managed to raise $10,000 in just 39 days, proving that the concept had legs, and that crowdfunding as a concept has the community well and truly behind it. It’s not just software projects that the site caters for, out of all the current activity on the site, software is probably the most dull – as creatives around the world have embraced it as a way to realise spectacular dreams. With everything from life sized mousetrap games to one man’s cultural journey across Mexico KickStarter has clearly captured the imagination of its audience. As far as the rules for funding goes, KickStarter keeps things simple. In order to receive the funding needed, a project must reach or exceed its funding goal or no money changes hands. If you do manage to reach your goal, 5% is taken from the project creator. Personally I think this is fair, with the current traffic / reach of the site, the tools available to manage your project, and the empowerment that a site like this gives individuals 5% isn’t that big an ask. Checkout the Hall of Fame webage listing the 100 most funded projects.
Another very similar site to KickStarter is RocketHub. Describing themselves as a grass roots crowdfunding site, Rockethub’s focus is again within the creative arts, with the two audiences for the site split into ‘Fuelers’ – those providing financial assistance to cool projects, and ‘Creatives’ – those coming up with the concepts, artwork and music and in need of funding. RocketHub’s fee is actually either the same or lower than Kickstarter’s. Rockethub always charge a flat 8% while Kickstarter charges a flat 5% AND passes along the Amazon Payments transactional fees to the artists who utilize their platform – which can be anywhere between 3% and 5%. So the total Kickstarter fee can be anywhere between 8% and 10% while RocketHub always offers a flat 8% fee. For crowdfunding tips and tactics please take a look at RoketHub's CrowdFunding Bootcamp sister site: http://www.RocketHub.org.
Quirky offers product designers and inventors a shot at getting their product to market. They call their product a ‘social product development tool’ – which it is, allowing the community to vote for products that they think would sell, and are worth creating, in the process single handedly changing the way people think about product development. Feedback can be received on product direction, strengths, weaknesses, opportunities and threats, all from within the Quirky site, resulting in products that have a stronger vision than those generated through traditional means.
Fundbreak is an Australian crowdfunding website, again with the all or nothing funding model, fundbreak insist that your goal is reached prior to receiving any funding at all. Fundbreak fees are set at 5% for invitees, or 7.5% for standard joe public users plus 2.4% for Paypal transaction fees making it one of the more expensive options considering what’s out there at the minute, however sometimes having a dedicated site for a particular country can help attract a local audience. If you have a project that is performance art or requires a live audience this can be a worthwhile advantage and I’ve no doubt that the majority of Fundbreak’s traffic is currently Australian. Worth noting as well that anyone can launch a project, or support a project to meet its funding goal. You are not required to be in Australia. Some of my favorite projects being created at present on Fundbreak are ‘Tell me a story‘ and ‘Oceans and Wires‘ two projects that received more than 100% funding and perfectly show the sort of creativity that can be taken for a walk and tested out online. Fundbreak is launching in the UK very soon as well, http://www.fundbreak.co.uk
Cat Walk Genius gives all you budding fashion designers out there the chance to launch your own clothing line, all by using the power of the crowd. You can be part of your own fan-funded collection, needing nothing more than your browser, a sprinkle of talent and some creativity. As with the other crowdfunding websites mentioned, their are two audiences. Supporters – the folks interesting in helping a designer financially, and the designers – who create the magic. You can apply to be either or both a designer or supporter. As a supporter, should you choose to back a designer who’s work you like, you are effectively buying shares in their lines. Starting from as little as £11, not only can you aid the production of clothing that you like, you are effectively investing in their future sales for up to 6 months. If your designer hits the target and their new collection goes on sale you get a share of the sales revenues, proportionate to your share of the funding. As a designer, Cat Walk Genius allows you to rally your troops, and sell direct to your fans through the site. You will be able to fulfill orders all without the cost of setting up your own online e-commerce shop. Adding images to a profile page is free for designers (up to a point) – with additional images costing a small additional fee. Overall Cat Walk Genius provides an innovative platform for designers to receive the recognition they deserve, and build a fanbase around their collections, all through the power of crowdfunding. Genius indeed.
6. Fans Next Door
Fans next door is a European Crowdfunding website (still in beta) and as yet they don’t take a cut for promoting projects through their site, with the only additional costs being the PayPal processing fees. They currently accept all types of art forms, from literature to films, visual arts and craft, music, performances, fashion, design, and video games. As the user base grows and additional forms of projects come along we can expect this to evolve. The reward concept has been used in the promotion of many of the projects, with the system being architected to show what you get from artists for increasing amounts of funding. For example €10 may get you a copy of the artwork, €20 may get you a copy of the artwork signed etc. etc. The more of a fan you are, the more you can expect to receive.
IndieGoGo offers a wide variety of creative art funding categories, with projects in everything from Inventions to Gaming to Mobile Apps to Performing Arts. No matter what you are trying to raise funds for, there will be other projects in that category currently receiving funding. Another benefit that IndieToGoGo offers is that they have hooked up with suitable partners to help give your project extra reach through commercial channels. Most impressive of these partnerships is MTV New Media, which could see your work being featured on MTV or VH1 – with of course, your permission. Desirable content includes fictional and non-fictional web series, shorts and other digital content, with the partnership helping to discover develop and distribute the best projects and creative talent on the web. At the very least it gives project creators a chance at much needed additional exposure. Another recognised side effect that IndieToGoGo have capitalised on for project creators, is unique rewards and pre-sales. Unique rewards have been used by artists such as Dizraeli to provide backers with artwork, private concerts and signed albums to further fund his musical pursuit. Pre-sales obviously allows you to generate interest in a concept or project prior to even starting it, with the web becoming your marketing machine, and IndieToGoGo your vehicle. Unlike a few of the other crowdfunding sites mentioned here, if you don’t fully reach your goal – you keep the current funds to date. With a few of the others mentioned here, (such as RocketHub and KickStarter) you must fully realise your specified amount prior to receiving anything. I’ve no doubt that this financial safety net will appeal to many project creators.
CoFundos operates on the basis of pledges, allowing you to signup, and create an open source project / idea that you would like to develop. Crowd sourcing is used at all stages of the project to allow contribution of the requirements and refinements to the project. Essentially, the system gives users of open source software the ability to fund specific developments that may not already be in the existing software path, and spread the cost amongst the community. Developers can choose to take your idea or project on, and when the implementation has been agreed by multiple bidders are requested to make the respective donations.
Profounder operates on the basis that inside everyone’s social circle both online and offline – there are people who are willing to support your dream. Each of those people potentially becomes an investor in your company, and equity is split amongst them. Profounder gives you the tools to raise the capital that you need, and the tools to manage all of the associated book-keeping, legals and compliance fillings. Right now, the site is still very much in alpha status, with registrations due to open in the Autumn. Still you can sign up for status as an ‘alpha entreupreneur’ if you want to start earlier than that, and are serious about using the system.
The First Crowdfunding & Philanthropy Website! The first crowdfunding website that lets you raise money for anything and give some forward to a charity, cause, or person of your choice. Microgiving is for anyone-- artists, musicians, film makers, developers, designers, dreamers, believers, idealists, inventors, entrepreneurs, non-profits, charities or people struggling through an economic hardship such as a loss of housing, medical emergency or natural disaster.
Lending Club was one of Facebook's first integrated applications. The 3 year old company's website matches angel investors and individual lenders with borrowers. The peer-to-peer lending business model allows members to directly invest in and borrow from each other. The Lending Club avoids the cost and complexity of the banking system and pass the savings on to the borrower and the investor. Both sides can win: better rates to eligible borrowers (with good credit rating) and better returns to investors. Forbes.com featured an online article about Lending Club and Renaud Laplanche on December 2, 2010. Check out the article is called Making Personal Loans For Fun And Profit - published in the December 20, 2010 edition of Forbes Magazine.
Microgifts is an iphone app that lets you donate as little as .99¢ to select charities. Go to the App Store to download a free copy. Each week a charity is featured and select information is sent to the app users iphone – giving them a chance to donate or not. Once a charity is featured by Microgifts, it is permanently added to the database and users can donate to the charity at any time using the app. The group of charities is ever growing as new charities are being featured and added to the database all the time. Donations start at .99¢, $1.99, or “x” which means you can add in your own amount. Any charitable organization can apply to be added to the Microgifts database simply by emailing them at email@example.com.
MicroVentures enables peer-to-peer (P2P) transactions by bringing small businesses and investors together in an innovative way. Peer-to-peer (or social) lending is, in its broadest sense, the name given to a certain breed of financial transaction (primarily lending & borrowing) which occurs directly between individuals without the inter-mediation/participation of a traditional financial institution. MicroVentures Marketplace targets companies that are creating technologies, products and services in the following competitive areas: Biotechnology, Business Products and Services, Computers and Peripherals, Consumer Products and Services, Education, Environment, Electronics, Financial Services, Healthcare Services, Internet Technology, IT Services, Media and Entertainment, Medical Devices and Equipment, Retail/Distribution, Semiconductors, Software, and Telecommunications. The MicroVentures Marketplace reviewers assess start-ups in a process similar to that of other Venture Capital companies. MicroVentures Marketplace screens all prospective applications and will select companies that fit a profile which includes an evaluation of suitable risk, likelihood of profitability, and willingness to give up an equity stake. There is a $100 fee, you fill out a preliminary MicroVentures Marketplace funding application, and submit your business plan. They will review it and if you are approved, your business opportunity will be listed on the website for investors to review and help fund.
This is a nonprofit microfinance program that lets you make a donation to the cause you most care about by selecting an issue to support. (You can also sponsor a child, a project, or make a general donation to microfinance). The donation is done online like any other donation – the thing that stands out for me is the amounts they are asking for are minimal. No $200 dollar donations here – most of the site includes donations for less than $20 dollars making generosity affordable.
15. World Vision Micro
World Vision Micro lets you become a banker – loaning money to a budding entrepreneur create a business that will support his or her family and subsequently their community. Here’s how it works: you read through the list of approved entrepreneurs and their business ideas, select one you want to support and make the donation (either all or in part). Once the business is fully funded you can follow the progress of your donation as the business grows. Ultimately the borrower repays the loan (the repayment rate is an impressive 98.7%) which is then recycled back into the program providing funding for another potential business owner creating an ever growing circle of prosperity. For as little as $25 dollars you can help reduce poverty around the world.
PeopleFund is a non-profit 501(c)(3) based in Austin, Texas. Founded in 1994 as Austin Community Development Corporation, they provide loans, financial and technical assistance to people who are left out of the financial mainstream. Since inception, their loans and financial consulting have helped put thousands of Texans on the path to financial security and independence. In 2008, they founded PeopleTrust, a non-profit 501(c)3 dedicated to creating and maintaining affordable housing in Texas. Need a loan or small business services?- email the staff at firstname.lastname@example.org
Create a profile and share your project or venture story. The peerbackers site makes it simple to share your business using their social media tools – just send the link to your peerbackers pledge page. Through the power of viral marketing, thousands of potential backers will ultimately view funding requests. Expand the definition of “your community” and pledge your way to funding your project. Anyone, anywhere in the world can contribute to a venture on the site. With a Visa, MasterCard or a PayPal account. To contribute, just browse and select a business and click the blue “Back This Venture” button. Choose the level of funding and select your reward. From there, you will go through the Pay Pal checkout process to complete your backing.
Go Ahead - Seize the Day - and Ask!
What's stopping you from asking your peers, friends, family, customers, co-workers, or even total strangers to fund your new business or project idea?