2020-05-19 08:46:26budgetEnglishCrowdfunding Sites in India: The financial crisis of 2008 brought the shortcomings of the traditional banking system to the forefront.https://quickbooks.intuit.com/in/resources/in_qrc/uploads/2020/05/crowdfunding-in-india.pnghttps://quickbooks.intuit.com/in/resources/budget/5-crowdfunding-sites-in-india/5 Crowdfunding Sites in India to Fund Your Next Big Idea

5 Crowdfunding Sites in India to Fund Your Next Big Idea

7 min read

The financial crisis of 2008 brought the shortcomings of the traditional banking system to the forefront. As a response to this, governments and regulators around the world put in place additional restrictions that made access to capital all the more challenging.

Such a step impacted startups and Small and Medium Enterprises (SMEs) big time. Hence, these enterprises set out in search of alternative financing options, one of them being “Crowdfunding”.

Crowdfunding as a source of finance has been competing strongly with other sources of finance like angel investing, venture capital and banks. Lesser restrictions and presence of funders on digital platforms has been responsible for stimulating the growth of these platforms all the more.

Such platforms enable investors to support the ideas of entrepreneurs by investing small amounts of capital digitally. Furthermore, there are different crowdfunding models depending upon the type of incentives offered to the funders or donors.

Kickstarter
Launched on April 28, 2009, Kickstarter is an enormous global community of over 10 million people. It helps artists, film makers, designers, musicians and other creators obtain resources and support they need to give wings to their ideas. Thus, Kickstarter helps people in bringing their creative projects to life.

Model
The creators have full control over their projects. They can create project pages, including videos and decide the rewards which they can provide to the backers of the project.

Once they are ready the creators can launch their projects and share the same with the community.

Also, the creator of the project sets a funding goal as well as the deadline. If the community like the project, they can offer money to build the underlying product or service. And in case the project turns out to be successful the credit cards of the backers are charged when the deadline of the goal is reached.

However, if the project is not successful, none of the backers are charged. This means that funding on Kickstarter is ‘All or Nothing’.

Kickstarter does not offer financial returns or equity to the backers. However, the backers get rewards offered by the fund seekers.

Fees
Kickstarter charges a fee of 5% on the amount of funds collected in case a given project is successfully funded. Also, a payment processing fees between 3% – 5% is also charged by its third party payments partner.

Visit: kickstarter.com

Ketto
Ketto is a crowdfunding platform in India that was launched on December 12, 2012. This platform allows individuals and NGOs to raise money via friends, family, relatives and well wishers for social, creative and personal causes.

Model
The term ‘Ketto’ stands for Key to Tomorrow thus indicating the very goal of the founders to create a change in the society. This platform allows users to share the details of their cause for which they need to raise money and then create a campaign page through which they can raise money for the cause.

The funds collected via campaigning are transferred directly to the beneficiary within the promised time and the platform deducts a nominal fee or commission for undertaking the campaigning. Also, the platform accepts donations in multiple currencies from anywhere in the world.

Fees
The fee amounts to 4.5% of funds raised or Rs. 2000 (whichever is higher) + Payment gateway charges (3%) + Taxes as applicable in case of an individual. Whereas, in case of an NGO, the transaction fee or the success fee is 5% of funds raised + Payment gateway charges (3%) + Taxes as applicable.

Visit: ketto.org

Milaap
Milaap is an online crowdfunding platform that was founded in 2010 by a team of young entrepreneurs. This platform enables anyone across India to raise funds for healthcare, education, sports, disaster relief and other personal causes.

Model
Both an individual or an NGO can raise funds from friends, family and a wider social network by creating a campaign on the platform itself. But first the individual or the NGO need to register or sign up on the MILAAP platform.

Once signed up, the beneficiary can create a story on the platform by sharing the details of the cause for which he intends to raise the money. The beneficiary is the person for whom the funds are being raised. It can also be the organization itself.

Thus, if the beneficiary is an NGO, then it will raise funds for itself by filling the requisite details of the company including the goal amount and the cause for which it needs to raise funds. Further, it needs to provide the details of the contact person who would provide company details and statutory documents including PAN number, 80G Certificate, registration number, company logo.

However, if the beneficiary is an individual, he can raise funds for either himself or any of his family members, his friends or relatives or any other individual by filling the requisite details.

The beneficiary individual or the NGO can upload photos, a video and other documents with the help of which contributions can be raised.

Fees
The platform charges a basic 5% platform fee for its operational and overhead expenses.

Visit: milaap.org

Wishberry
Wishberry is a rewards-based crowdfunding platform that was launched in 2012 and is based in Mumbai. The platform allows the beneficiary to raise funds for his project by creating a community that funds the project and also spreads the word about the project. That is, the beneficiary raises small amounts of money from a large pool of people instead of one or two investors.

Wishberry accepts projects for film, music, dance, theatre, art, design, photography, comics and publishing.

Model
The beneficiary submits a project for which he needs to raise funds by filling a form. Once the platform approves beneficiary’s project, the Wishberry consultant helps him create a campaign.

After the campaign is ready, the beneficiary gets 45 days to raise the goal amount. If he fails to raise the target funds, then the money so raised is returned to the fundraisers.

Since Wishberry is a rewards-based crowdfunding platform, this means here funders do not get any monetary return such as profits, equity etc. for their funding to creative projects. They make contributions in small amounts (such as ₹ 500, 5000, 10,000 etc.) and in return get intangible rewards like early bird or special access to the project they funded (invite to film premiers), limited edition merchandize, experience in the making of the project etc.

The funders can be friends, family, colleagues, alumni, as well as Facebook fans and friends, twitter followers etc. Even strangers can contribute provided the project goes viral.

Fees
There are three categories:

Category I – Less Than 5 Lakhs
Fees – Rs 3,499 plus taxes (non-refundable one time fee)
Contract charge – 9.5% plus 2.5% transaction charges from funds raised upon campaign success
Category II – More Than 5 Lakhs
Fees – Rs 12,999 plus taxes (non-refundable one time fee)
Contract charge – 9.5% plus 2.5% transaction charges from funds raised upon campaign success
Category III – Student Campaigns
Fees – Rs 2,499 plus taxes (non-refundable one time fee)
Contract charge – 9.5% plus 2.5% transaction charges from funds raised upon campaign success
Visit: wishberry.in/

Fuel A Dream
Fuel a Dream is a crowdfunding platform and a marketplace for individuals and organizations that was launched in April 2016 and is based in Bengaluru. Both individuals and organizations can raise funds for creative ideas, causes, charities, events and community lead activities with a primary focus on India itself. Only Indian nationals 18 years or above with identity proof holding an Indian bank account in his or her name having an active FD account and mobile number can apply.

Model
This platform works on Fixed (All or Nothing) or Flexible (Keep What you Get) models.

Fixed Model
Under Fixed mode, the beneficiaries creating campaign on the platform need to reach their funding goal in order to get access to funds before its end date.

In case campaign fails to meet its goal, the funds are returned to funders and the campaign owner gets nothing.

Flexible Model
However, as per flexible model, the campaign owner can keep whatever amount of funds have been collected irrespective of whether campaign meet its goal or not.

Fees
For normal campaigns, the platform charges a processing fee of Rs. 3,000 plus GST of 18% per campaign which is non-refundable. Further, a contract charge of 6% of the total amount collected in the campaign for both flexible and fixed campaigns is charged. If a project under fixed campaign does not meet its goal, then the entire money is returned to funders and no fees is charged.

However, in flexible campaign, 6% contract fees is charged irrespective of the amount collected. Then, another 3% of the total amount collected in the campaign is deducted as payment gateway charge.

In case of group campaign, Rs. 3,000 processing charge is waived off. Further, a contract fee of 9% of the total amount collected in the campaign for both flexible and fixed campaigns is charged. If a project under fixed campaign does not meet its goal, then the entire money is returned to funders and no fees is charged.

However, in flexible campaign, 9% contract fees is charged irrespective of the amount collected. Then, another 3% of the total amount collected in the campaign is deducted as payment gateway charge.

 

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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