If you have an interesting project in mind and you need money to start, then crowdfunding sites are the solution.
Through a crowdfunding, an entrepreneur asks for money from a larger number of individuals or companies for a clear project. In order to reach a large number of potential backers, the contractor signs up on a crowdfunding platform.
The crowdfunding platforms, such as Kickstarter, Indiegogo, and Quirky, are funding alternatives for start-ups that have difficulties with getting money from banks. They are similar in concept but different in operating.
Kickstarter-a digital crowdfunding program
Kickstarter is one of the most important crowdfunding platforms who help fund global projects. Yancey Strickler, Charles Adler, and Perry Chen launched this crowdfunding website in 2009.
The funded creative projects are in areas such as video, cinema, journalism, music, and comic strips.
Kickstarter has a 5% fee for every successful project; in addition to this fee, there are also charges for bank transfers somewhere between 3%-5% of the amount.
To propose a project on Kickstarter you must have at least 18 years old and live in one of these countries: USA, New Zealand, Switzerland, Canada, Austria Germany, Netherlands, Denmark, Ireland, Norway, Sweden, Mexico, Italy, Belgium, UK, Spain, Luxembourg, and France.
Also, you need to make a presentation of your idea, to describe it in a professional way. Your presentation will convince people to donate money to finance your business.
On this website are propose all kinds of interesting projects and ideas. Just think about how many products like Pebble, Ouya or Coocoo Watch have come to your life thanks to Kickstarter. The open rules behind Kickstarter also generate some projects difficult to understand. Like this Zack Danger Brown Potato Salad Project. His project on Kickstarter to make a potato salad has raised $ 55,492. Though it’s hard to understand why someone would invest money in such a project is proof that anyone can earn money on the internet with a challenge idea.
When you set up a campaign, you specify the donating period and the pledged goal. If during this period the project collects the necessary donation/money, the project is financed. Therefore the author receives the amount of money in his account.
If he does not reach the target amount, he won`t receive a penny, and the project is considered unfunded.
It cannot be a financing opportunity (stock actions) for those who donate money but depending on the amount left they can get some benefits. These are not just about receiving the product, but also about other things like putting their name on products` page, getting limited editions, meeting with the creators of the product, etc.
Indiegogo – GoFundMe crowdfunding charity platform
It is an international funding campaign website, founded in 2008 by Eric Schell, Slava Rubin, and Danae Ringelmann. Compare to Kickstarter this crowdfunding website is available in all countries.
The website function on a reward system, the people who want to donate/invest/help finance a project or product, to receive a gift from the entrepreneurs.
Indiegogo charges a commission of 5%, plus the third-party credit card 3% + $0.30. If you launch your campaign on another platform you pay 8%. And if you get help from Indiegogo while you are promoting your campaign on another platform, the commission will increase.
Indiegogo also has a program named GoFundMe that people can use to raise money for emergencies, medical expenses, education, animals or other life events. This program has no fee and no deadlines.
This platform is different because it lets you keep the funds even if you have not reached the goal. As long as funds help you reach your goals, you can keep your money. Under two conditions: Before starting the Campaign, you need to specify what type of funding you want: fixed or flexible. And the second after the Campaign is over, you must continue to interface with your backers.
The ideas promoted are more about physical products, gadgets, innovative products that will ease your everyday life. Products that get financing can also be sold on their platform. In this case, Indiegogo will charge between 10% and 15% of each marketplace sale.
Quirky – a crowdfunding platform for physical products
Well, this crowdfunding website is slightly different from the two above, because you have the opportunity to get involved in different projects, not just propose one. If you contribute to another project with ideas and solutions you will receive a percentage of sales. Not only that but by commenting, voting and supporting some projects you increase your earnings
As for the author of a project, he receives only 30% of the product` sales.
On Quirky anyone can come up with a product proposal:
- the ideas are voted and commented by the community; are evaluated to determinate which is the product with the greatest potential for sale;
- the one who came up with the idea receives 30% of the sales, but even those who voted for the idea receive a small amount of money;
- after choosing the product, it goes through several stages of development (choosing a commercial name, details such as color and production material, market studies, etc.);
- the resulting product is assigned a minimum number of pre-orders, and when it is made, the product is manufactured;
- those involved in the project receive into their account the money from the sale
If you’re a person who always finds fresh solutions, these crowdfunding sites can help you monetize your ideas. The good part of these platforms is the money. No loans, no banks involved, you get to start up your business with others help. If your product is innovative and useful, you will definitely get the money you need. The less convenient part is the fee you must pay to them and, in some cases, you quit your intellectual property rights.
If you are not a creative person, and you’re a more practical person there are solutions for you too. Just look around at Legitimate Online Business or Good To Know category. You will definitely find help in making money online. Or you start with this review, Wealthy Affiliate. You`ll see that is possible gaining money from others stuff inventions.
Have you ever had contact with any of these platforms? We would love to hear your point!