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How to Pick the Right Crowdfunding Site

You’ve got the perfect idea; this project will trump all others, but how should you go about funding it? Soliciting investors can be an arduous endeavor, but technology has finally caught up with the blossoming entrepreneur. Crowdfunding platforms have popped up all over the web, and they are providing free thinkers, creators, inventors, and entrepreneurs with the tools they need to reach investors willing to give out some cash for worthy ideas. With a plethora of crowdfunding sites out there, here are some tips to help you choose the right site for your next venture.

The Top Contenders

Out of all the crowdfunding sites out there, there are a few that stand apart from the crowd. Here’s the top 5 list:

  • Kickstarter
  • Indie Go-Go
  • Crowdfunder
  •  Rocket Hub
  • Quirky

The Low Down

Kickstarter uses a donation-based platform to help fund creative projects. To date, Kickstarter has helped over 5 million innovators and entrepreneurs raise over $1 billion in investor funds for their projects. Kickstarter isn’t the platform for raising business funds or charities; it’s for those who are looking to reach investors for creative projects like artwork, restorations, or cool new techie products.

Though it is still donation-based, the Indie Go-Go platform is much more broad in comparison to Kickstarter. It allows individuals and business raise funds for just about anything; from starting a new business to asking for help with personal finances. Indie Go-Go is indeed a viable choice for those looking for an open-style platform that is proven to work well for raising capital.

Crowdfunder is not donation or rewards-based, it is all about making investments for the long term. Crowdfunder boasts over $2 billion in raised funds to date due because it allows angel investors, venture capitalists, and individual investors to hook up with startups and fledgling entrepreneurs. This makes Crowdfunder the most formal and effective of the crowdfunding platforms for business startups.

Rocket Hub is unique compared to all the other donation-based crowdfunding sites due to the fact that it allows collaboration between investors, campaign owners, and potential marketing partners. Rocket Hub is still geared more toward the creative innovator than the business owner but it offers a wide array of choices when it comes to collaborating with others to get your idea off the ground.

Quirky is the perfect funding platform for the inventor. It allows like-minded individuals to come together and hash out ideas through it is community-based platform. Quirky is also donation-based, but like Rocket Hub, it brings more opportunity to the inventor by allowing seasoned professionals to connect with and lend a helping hand to fledgling inventors and developers.

Research Site Requirements

Choosing the right crowdfunding site is essential to your success. Deeply research each of the top sites before making a selection. Rewards-based or donation based sites collect donations from investors on the principle they will be rewarded in some way for higher donations. For instance, and indie film maker may offer the reward of film credit or “meet and greet” to those who donate $500 to the project. In some cases, donation-based reward sites require the campaign owner to decide on a preset donation goal, which if not reached, all the funds raised are lost. It can be a huge disappointment if you were only a few dollars shy of your goal only to lose all the cash because you didn’t reach your preset amount. If you decide to go with one of these, carefully plan out your campaign and preset goal amount before its launch.

Find Out How the Site Gets Paid

Some crowdfunding sites are ad–based; meaning, they get paid by posting banner ads on your platform. If the site isn’t ad-based, it survives by taking royalty fees from donations. In some instances, these royalties can stack up to 4% of your total funds raised. Make sure before setting up your campaign, you know the total costs of receiving your donations through the platform and factor this percentage into your goal donation/investment amount.

Picking the Right Platform

They key to enticing donations or investments is by making your campaign stand out. For example, when choosing a crowdfunding site, it’s important to find out what types of multimedia tools are available; interactive media such as audio and video can solidify your brand and aid you in spreading the word about your campaign. When designing your platform, remember to be creative and let your brand culture shine through.

Crowdfunding can be a lucrative choice for garnering investments for your new venture. Statistics show that crowdfunding is helping to heal the global economy by connecting investors with small businesses and entrepreneurs. The crowdfunding freight train shows no sign of stopping, so if you have a great idea or are looking to finally fund your startup – now’s the time to dig in.

Photo via BoxyRoomBlog

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