Non-Equity Crowdfunding Sources
These crowdfunding platforms primarily focus on single-event projects, such as building renovations, product assembly or equipment financing. Here are a few popular venues to promote your projects.
Of all the crowdfunding sites, Kickstarter has gotten the most attention. The service is at its best when it is used to showcase interesting products. A gadget that solves a problem shared by a large number of consumers, for instance, or a movie project from a highly respected independent director.
One great thing about Kickstarter is that campaigns can be set up to reward funders. Instead of handing over money in return for a portion of proceeds, funders pay money to be first in line to get the product. If the product won’t be available for a while, businesses can offer goodies like T-shirts or baseball caps with the product logo. Investors only pay if the minimum funding goal is reached by the end date.
Like Kickstarter, Indiegogo allows businesses to post campaigns and invite contributions. Also like Kickstarter, Indiegogo lets customers purchase first editions of products in exchange for backing.
But one area in which Indiegogo differs from Kickstarter is its funding. If a Kickstarter campaign doesn’t meet its goal, the investor doesn’t pay. With Indiegogo, you keep the funding whether the goal is reached or not. But this also means a business needs to ensure it can produce any promised rewards even if the minimum isn’t reached.
Another difference between the two is that Indiegogo is more flexible about the projects it allows. Kickstarter prohibits certain types of items, but Indiegogo offers to allow any item, as long as it is legal and non-fraudulent.
Another player in the crowdsourcing marketplace is RocketHub, which also lets businesses keep the funds raised whether the project meets its goal or not. There are four major categories for RocketHub projects: art, business, science and social.
Within each of those major categories are subcategories that can more directly address a business’ specialization. This means if a business can’t reach its goal, it must still be able to produce any promised rewards.
One of the most exciting aspects of RocketHub at the moment is its new partnership with A&E. Through this project, called Project Startup, a business could land funding from A&E and appear on the show, on its website or in its magazine.