So you’ve got a great idea. Now all you need is a bit of start-up capital to get it up and running! While not so long ago the only real option was convincing the bank to lend you money, these days crowdfunding can be a great way to not only raise funds but also test your idea and recruit loyal customers.
There are a number of crowdfunding platforms around the place to choose from so there are a few things you should consider before deciding on one.
Which platform is most suited to your industry/idea?
Crowdfunding platforms tend to specialize in a specific area. Kickstarter focuses on inventions and creative projects where as StartSomeGood focuses on social entrepreneurs and non-profits. It’s worth doing your research to find out which platform is best suited to your idea.
What is the platform’s process?
Some platforms, such as Pozible encourage you to provide different ‘rewards’ to your funders depending on how much money they donate. Some platforms require you to meet your target in order to be able to access the funds while others let you access what you raise no matter how much or how little. Consider what resources you have, what you can commit to and make sure that funds you raise will be available to you at the right time so that you can make your idea happen.
What sort of fees/charges are involved?
Some crowdfunding sites take a cut of the funds you raise with the amount varying from platform to platform. Make sure you read the fine print and understand exactly how much of the funds you raise will be eaten in to by funds.
Make sure you can deliver.
Make sure you have taken the time to budget accurately for your project and that you have set an adequate fundraising target to make your idea a reality.
My top 3 crowdfunding platforms
Founded in Melbourne, Pozible can be used to raise money for just about anything. You must reach your target in order to access funds.
Indiegogo has flexible funding options so you can opt to receive funds raised even if you don’t reach your target (provided you are committed to completing your project)
If you’re inventing something new or have an idea for a great new product then Kickstarter is for you. With Kickstarter, people essentially pre-purchase what you want to make and then once the funds are raised they receive the object as a reward.
Chris Browne is the Founder and Managing Director of Rising Tide Financial Services as well as a highly regarded business coach, mentor and industry expert.