Tag Archives: Crowd funding

9 Crowdfunding Websites for Entrepreneurs and Artists

16 Aug

Here are 9 alternative sources of funding for entrepreneurs and artists who are trying to raise capital for their startup or project.

MicroVentures

Also described as peer-to-peer lending, MicroVentures works with investors as well as with those who need money to get a certain project off the ground. According to their website, MicroVentures works with small companies and businesses in variety of 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
Other
Retail/Distribution
Semiconductors
Software
Telecommunications
These companies pay $100 to MicroVentures and then send their business plan to the site for approval. Once approved, this idea will be posted on the website for serious investors to consider.

Kickstarter

Kickstarter is a crowdfunding site that is getting a lot of attention these days. With creative people posting new projects that need funding every day, this site is a place where the bohemian idea can turn into a viable possibility. The process is simple and a person can setup their Kickstarter project in just a few hours. A person posts their project details and creates a funding goal. During a certain period of time, investors and individuals are able to contribute so that the project meets or exceeds that goal. The project will only get the funding if the goal is met.
When the project creator reaches their goal, Kickstarter takes 5% of the monies for their service.

Quirky

If you’re a designer who needs to have financial support, Quirky is a crowdfunding site that supports your creative and inventive needs. The most valuable part of Quirky is the feedback you can receive for your project idea. For a $10 fee, you can post your idea and then see what others think about it. This allows you to create a product or service that is going to meet your market needs, increasing your chances of success. Once you have received feedback, then Quirky will decide whether or not they want to make the product. If they do, then you get paid. With the community vibe, Quirky is more of a progressive site than a straightforward investment site.

RocketHub

At RocketHub, you will find there are two audiences this crowdfunding site helps: Fuelers and Creatives. Fuelers are the ones who invest in the projects that the Creatives post. Unlike Kickstarter, there is more interaction on the RocketHub site, with plenty of resources for those who want to refine their idea before or after they post it on the site. Users can earn rewards or badges on the site in order to promote each other.
On RocketHub, there is a flat rate of 8% for Creatives who receive investments from Fuelers.

Pozible

When you look at Pozible, you will notice this is another crowdfunding site that offers many of the same tools as other sites already listed. What users will want to keep in mind is that local projects that are not based in Australia may not be as well received on this Australian website. Like other sites, companies and individuals will post their projects on the site and then investors will decide whether to invest in the projects or not.

Fees for using Pozible include 2.4% for PayPal transactions, 5% for invitees, and 7.5% for everyday users.

IndieGogo

With IndieGogo, you’ll find a creative crowdfunding site that’s interested in everything from performing arts to gaming ideas. Since one of the partnerships with IndieGogo is MTV, this is a valuable resource for those who want to break into the music and entertainment industry, but need the funding to get started with their unique idea. Like Kickstarter and others, you will need to meet your funding request before you can receive the funds. What sets IndieGogo apart is its use of pre-sales and rewards, which can create buzz for a project, even before it is funded and ready for the public eye.

CoFundos

If you’re interested in creating an open source software project, then CoFundos is the right crowdfunding site for you. Here, developers can post their open source software ideas, get feedback, and then request funds to continue to develop the project. You can post an idea and developers can agree to make your idea into a real program. While funding is not the only source of assistance on this site, donations are expected from those who decide to bid on a project idea.

Fans Next Door

Fans Next Door is a crowdfunding site that accepts all types of creative projects:
Visual arts
Performances
Fashion
Video games
Design
Music
Crafts

Here, posters will post their ideas and then investors will come along and help fund the idea. Since there is a reward system in place, investors are compelled to invest more as they will get more for their investment when they do. And the biggest plus of this European (beta) site is that there are no additional fees outside of the PayPal processing fees.

Crowdfunding is a new way to make sure that smaller companies and artists get the funding they need. By spreading out the investors, funding isn’t as difficult to achieve, but success is.

ProFounder

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.

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Financing Trends for 2011

28 Dec
Image representing Catwalk Genius as depicted ...

Image via CrunchBase

Hello Ladies,

2011 is almost here and I am sure a lot of you a wondering what types of financing will be available for small businesses. According to one of our favorite websites entrepreneur.com there are 5 financing trends that you should watch out for.

1. Crowdfunding (especially niche crowdfunding)
Kickstarter popularized the idea of crowdfunding, which is when a large group of people help fund a project or business through a cluster of small donations. Kickstarter began as a new way to help artists get projects off the ground. In return for funding, donors receive goods or services, or even just a well-crafted thank-you, in lieu of equity or interest payments. Now the same idea is spreading to business ventures. Diaspora, a tech company that wants to build a social network to rival Facebook got more than $200,000 in seed money from a Kickstarter campaign.

3 hot niche crowdfunding sites are:

Catwalk Genius – Members fund fledgling fashion designers and in return get a share of the revenue generated by the designer’s clothing lines.

Indiegogo – Leans toward creative and tech business ventures.

Peerbackers – A community of people specifically looking to support entrepreneurs, which are similar to Kickstarter in that they encourage preselling products as a way to raise funds.

2. Microlending
The idea of offering very small loans, even just $100, has its roots in helping women in underdeveloped countries start small business ventures. But as the recession tightened credit offerings, the popularity of microlending has extended to the U.S. — especially as aspiring entrepreneurs are starting ventures with far less than the $50,000 business loan threshold common at many banks. Not-for-profit Accion is the largest organization putting that idea into action with loans that start at $500 and average a little more than $5,000. You can also research other microlending programs around the U.S. through the Association for Enterprise Opportunity’s searchable database.

3. Credit Unions
These cooperative financial institutions are among the most active in making smaller loans to entrepreneurs and have only gotten busier in recent years, according to the National Credit Union Administration (NCUA). Its figures show credit unions made more than $33 billion worth of business loans in 2009, up from $12 billion in 2004. They have relatively low default rates and terms that are often better than traditional banks, according to the NCUA and Federal Deposit Insurance Corp. (FDIC). Credit unions also can be a resource for aspiring business owners whose credit score might not pass muster with other banks. The catch? You will likely have to become a member of the credit union to borrow from it.

4. Bootstrapping
If you’ve trimmed your start-up costs down to a few hundred or a couple thousand dollars, why not skip the loan altogether and bootstrap your business? When you tap personal savings, get vendors to front start-up supplies for delayed payment terms, hit up friends and relatives, or use one money-making venture to fund another, then you’re bootstrapping. It’s a good way to test an idea and make sure it has legs before investing heavily in a new venture. Think of it as the business equivalent of going retro. It’s an idea that has been around forever, but is making a big comeback as people who have lost their jobs in the recession increasingly look to start a small business as an alternative to traditional employment.

5. The Slow Money Movement
Woody Tasch, longtime chairman of Investors’ Circle, a hugely successful angel network for socially responsible companies, is spearheading this fledgling movement. Its ambitious aim is “a million Americans investing 1% of their assets in local food systems within a decade.”

The idea is to help entrepreneurs who buy, use and sell local food or who engage in sustainable agriculture get seed funding from people they know in their communities. The terms are set on a deal-by-deal basis, which can range from a loan to equity to a credit extension. Backers are encouraged to invest in ventures that won’t just turn quick profits but will benefit their communities over the long term by creating jobs, supporting other local businesses and the fostering local food chain.

For more information visit www.entrepreneur.com

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