If you believe your business idea can appeal to a wider audience, crowdfunding can be a good way to acquire capital. This strategy delivers your pitch to a wider audience, with the potential to achieve a funding goal through small contributions from a large group of people.
Crowdfunding typically rewards donors with discounts, a completed product, or other perks. Creative endeavors and retail products with significant consumer appeal can often be successful with crowdfunding.
A key benefit to crowdfunding is that it might carry less risk than many other funding options. Donors’ funds might not be contributed unless the campaign meets its stated goal. Likewise, the business owner may not have to provide any of the promised perks if the campaign falls short.
Some crowdfunding platforms that support entrepreneurs include:
- Indiegogo: Supports crowdfunding campaigns for entrepreneurs and innovators, with an added Indiegogo InDemand option for unlimited fundraising once a campaign is completed
- Crowd Supply: Works to “bring original, useful, respectful hardware to life”
- Fundable: Allows startups to raise up to $50,000 from backers, or higher amounts from equity investors
- SeedInvest: Connects startups with high growth potential to investors. Businesses using the platform must submit an application to be vetted, and less than 2 percent of applicants are accepted