What is Crowdfunding?
Blog 002 – Published October 2021
Are you an entrepreneur looking to fund one of your projects? Or maybe you’ve seen fundraising campaigns online and want to know how and if you could get involved? Well here is all the info you need about crowdfunding…
1 What is it?
Crowdfunding is a way for anyone to fund projects by raising money from a large amount of people each donating a small amount of money. This is usually done online where anyone can set up a campaign, whether it be individuals, companies, or charities. A campaign will have a specific cause such as a product that will be made or a platform that will be set-up and if people like the concept, they can donate a small amount to make it happen. Sometimes donations can be reward based where a reward is unlocked by donating, for example you help fund a clothing line and in return receive an item of clothing once the project is funded.
For investors, crowdfunding is way to diversify their portfolios and increase their chances of a big pay-out. Although a risky investment, one successful investment could recoup all losses and provide a substantial return. For entrepreneurs, it’s an easy way to pitch your product or opportunity to large amounts of people in short period of time and give interested parties more ways to contribute from offering equity in return for thousands in investment to offering a t-shirt in exchange for a few dollars.
2 How You Can Help
If you want to explore what projects are out there looking for funding, try searching on popular crowdfunding websites such as Kickstarter or IndieGoGo. If any catch your eye you can donate a small amount of money to help fund them, just make sure this is money you can afford to spend.
The best campaigns are those that address concerns that you feel strongly about, such as a product that could help improve your day-to-day life. It’s important do to research before donating to make sure you back a project that looks like it has a high chance of succeeding, here are a few things you can check:
- Read the creator’s bio to see if they mention any previously funded projects that have been successful.
- Check social media to see if they are actively promoting their product or platform.
- Look at the crowdfunding site’s policies on what happens when a product isn’t fully funded or delivered.
3 Alternatives to Crowdfunding
There are other ways entrepreneurs can fund their projects which are mostly offline:
- Debt: taking out a loan.
- Asking family and friends for donations.
- Pitching the project to angel investors or venture capital firms.
- Using personal savings and equipment.
4 The FunDonor Mission
At FunDonor, we are building a new platform that will make donating more engaging for young people and raise lots of money for charities. Our crowdfunding page will be launching soon on Indiegogo and there will be some fun perks up for grabs! If you’d like to find out more about the project, click here.
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8 Free Ways to Give
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