A Different Way to Fund Your Great Business Idea

Do you have the next million-dollar idea that you are seeking funding for?  Do you have a killer iPhone or Android app that you have been waiting to develop?  Perhaps it’s the next creative blogging platform that you need a bit of money to bring to life? If you answered yes to any of these questions, then you should take a moment and consider the possibility of crowdfunding to attract buzz, customers, and funding towards your idea now.

What is Crowdfunding?

Harnessing the attention and trust of people who network and pool their money together, often through the web, to support a cause, effort, or business.

In a nutshell, it’s basically solidifying an idea, throwing together an appealing storyline and pitch, and then promoting the heck out of it to potential contributors via social media, viral video campaigns, etc. Best of all, crowdfunding helps you build a customer base on the fly by appealing to a large audience of micro-funders.

Do contributors receive ownership in my business?

Nope. Instead they are often given unique rewards for their financial contribution such as: access to alpha or beta trials, guest tickets to private company events, custom-tailored products and services, and mentions in everything from newsletters to permanent web pages. The really interesting thing about this approach is that the reward tends to change with each new funding effort.

So, where should I go to get started?

Depending on the type of business idea you have, you more than likely have several options. Here are a few crowding platforms that have seen some success:

Kickstarter

This is the place to approach if you have a creative idea or ambitious endeavor. Kickstarter openly states that they are a “way for artists, filmmakers, musicians, designers, writers, illustrators, explorers, curators, performers, and others to bring their projects, events, and dreams to life.” One relatively recent example of crowdfunding success on this platform was that of Diaspora.

It is important to note that all projects must be screened and approved by Kickstarter prior to funding on their platform. Also, you are required to set a funding goal and meet your objective.

IndieGoGo

Although not as notable and widely recognized as Kickstarter, IndieGoGo allows you to start crowdfunding immediately for any project or idea.

One notable difference that sets IndieGoGo apart from Kickstarter is that you keep the money that you raise, whether or not you reach your funding objective.

Kapipal

This is probably the best solution if you are looking to raise funding within your network (whether family, friends, friends-of-friends, colleagues, etc.). Kapipal readily proclaims that they are “for everyone that wishes to raise money for a group purchase, charity, personal project, birthday present, wedding present, and so on.”

For those of you that are working on another project that you’d like to consider crowdfunding, feel free to check out this complete list of options.

What are your thoughts? Can you think of any additional, successful crowdfunding platforms that we didn’t include? Do you have another brilliant nontraditional way to fund a business idea that you’d like to share? Feel free to contribute in the comments below!