Raising Money

Can Crowdfunding Draw Investors for your Small Business

Raising money for a small business can be quite a challenge. While crowdfunding is slowly becoming the order of the day, what chance do you stand to raise your business funding for your dream enterprise?

And did you think what crowdfunding is in the first place? Crowdfunding is in fact a soft name to asking people for money to kick-start your business. This would mean that the funder gives out a small amount but with each contributor giving out a small amount, it will only add up to make it large enough to start the business.Crowdfunders may not expect monetary returns for their assistance, but may have small expectations in terms of free gifts or life-long free service or discounts on your products and services. These rewards are in lieu of the equities or shares of the company.

With crowdfunding becoming popular these days, several online platforms have emerged that will help you raise funds. Kickstarter is just one popular example. Kickstarter is a crowdfunding online forum and was launched in April 2009 with around 24,000 projects receiving support from Kickstarter. And they have raised more about $323 million for these projects so far. The portal especially supports creative projects.

Is it free?

Kickstarter doesn’t charge you anything when you start a project, but it does take a 5 percent of the funds that are generated. This apart, the processing fee of the payments goes to Amazon at the rate of 3-5 percent of the contributions.

How crowdfunders benefit from Kickstarter

Kickstarter offers crowdfunders a rewards ranging from coffee-mugs to T-shirts. These little gifts can be very fulfilling to the donors.

How much can you contribute

Contributions come in figures ranging anywhere between $5 to $1000.

Do projects with Kickstarter have a time-restraint?

Yes, and this has been a concern among many. The projects are mostly entertained between a period of one to two months with Kickstarter during which time they do their best to capture public attention. Else the project is stalled with none fulfilling a pledge.

Entrepreneur learning

Crowdfunding is growing as a popular form of raising money for small and medium start-ups. Kickstarter is one online forum that has attracted a lot of business aspirants. There are many such avenues that indeed draw a number of investors as crowdfunders. Why not look towards crowdfunding as a means of small business funding?

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