The possibilities of how to finance your business seem endless. When should you consider getting a loan, consider KickStarter, or just scrapping together what funds you may have to get your side-hustle started. What are your thoughts on going to the banks, using credit, opening accounts directly with suppliers, etc.,
I asked a similar question in the starting your business area. Is this a better place for that? Hoping to hear people's opinions. Thank you
Here's a blog post from our Garage platform that may be of help with crowdsourcing / funding:
This one is so popular that it’s entered our everyday language. Kickstarter is geared more toward creative projects like a new album or writing a book as well as products and inventions like a personal single-wheel vehicle or a pocket-sized solar charger. It’s not really for buying equipment or helping a nonprofit, and you don’t get to keep your money unless you reach your goal through financial pledges.
I’m more familiar with this crowdfunding platform because I used it to help a friend and his nonprofit organization. Like Kickstarter, you can use Indiegogo to start up any project or idea. But unlike Kickstarter, you can set up nonprofits on the site. Indiegogo also offers Flexible Funding, which means you get to keep the funds you raised — even if you didn’t reach your goal.
Unlike all the other crowdfunding platforms in this list, Patreon is a monthly subscription platform that allows supporters and donors to provide regular contributions — rather than one bulk payment.
Patreon’s goal is not to support a particular project, but to provide ongoing support for a creative venture or artist, such as supporting your favorite web comic, band or musician, or even your favorite podcast.
I support the Canadaland and I Hear Of Sherlock Everywhere podcasts on Patreon because I enjoy them. For only a few bucks a month, I can make sure they’re able to continue making their podcasts for me (and thousands of others) to enjoy.
GoFundMe is the “hey, can I borrow 50 bucks” of crowdfunding platforms. I see it used mostly for personal emergencies, but you might have seen it used elsewhere. I’ve seen people use it to cover an emergency vet bill, a trip to the dentist, and even for a Kenyan farmer to attend an agricultural conference in Australia. In some cases, I’ve seen people use GoFundMe to raise money to cover uber-high medical bills for terminal illnesses.
Being a musician can be pricey. (As the husband of a jazz singer and father to three budding musicians, I can attest to that!) So anything you can do to cover costs when you launch an album, promote it, or go on tour takes a load off. That’s where PledgeMusic can make a real difference. And like most of these other crowdfunding platforms, you can provide rewards for donors who pledge a certain level such as downloadable digital music.
This site is geared more toward helping “worthy causes,” rather than material goods and profits, so if you’re looking for business funding, this might not be a good bet. Razoo lets you fundraise for causes concerning children and family, education, animals and pets, and even faith-based causes.
RocketHub is more for entrepreneurs looking for venture capital, unlike most of these others. With their ELEQUITY Funding Room, you can pitch your project idea, and see if you can generate any interest among their funders and donors. They also have resources available on their website, like how-to articles for running and promoting your business.
Like Razoo, Crowdrise is geared more toward helping “real world issues,” rather than funding for-profit ventures. I saw projects for Haiti, including a boy who wanted to donate solar technology to Haiti for his bar mitzvah, and for January’s Women’s March on Washington. But you can also use it to fund birthday parties, weddings, and even college scholarships.
If you’re a mobile developer looking to launch your first app, you can skip Kickstarter and GoFundMe, and raise your funds on Appbackr. Not only can backers fund apps that are on sale or currently in development, but backers can earn their money back once the app makes its earnings back in the app store. This won’t make people rich, but they can see a small return on their efforts.
If you’ve gone through all the crowdfunding platforms, but you still want to try to land an angel investor or venture capitalist, you can catch their eye on Crowdfunder. Just like a regular venture capital program, you can sell equity and debt in your company to raise money and attract angels and VCs to your company at the same time. I saw projects that needed $1 million to $2 million in funding, but earned as much as five times that amount.
This is a WordPress plugin you can add to your own WordPress blog and use to collect donations from visitors. And unlike every other crowdfunding platform I reviewed, Give does not take any fees based on what you raise. They make their money selling premium add-ons to their system.
Another WordPress plugin, Charitable lets you collect donations on your website via PayPal, and they don’t charge any transaction fees for credit card donations. You can also use well-known and trusted credit card processors like Stripe and Authorize.net to accept plastic.
This is a site for investors who want to invest their money, but still do a little good. As a borrower, you can borrow up to $40,000, and the investors will make between 5.5 percent and 7.7 percent as you repay the loan with interest. It’s easier to get a loan on Lending Club than a normal bank, and they’re more likely to fund unusual projects and ideas.
OK, if your business idea didn’t pan out, give AngelList a shot because you can apply for a job at more than 60,000 startups with a single application — it’s the only site I found that lets you do that. But if you’re looking for a place to invest, then AngelList has those opportunities as well. Oh, and you can still apply for funding, too. Just fill out an application and you’ll be introduced to potential investors and lenders. This is not a worthy cause site like Razoo or Crowdrise; it’s straight-up startup capitalism.
I picked this one partly because it’s an international crowdfunding platform, but also because I like to say the name. Ulule. Ulule. It’s like saying ukulele, but without the “K.” Ulule funds mostly creative projects, and they’ve helped more than 16,000 artists and entrepreneurs in 198 countries. Don’t let their international focus frighten you though. If you’ve got a worthwhile project you believe in, give Ulule a try. ULULE!
A competitor to Lending Club, Funding Circle will give up to $50,000 in personal and business loans (interest rates start at 5.49 percent). They also give you the option to invest money. You can even choose the loans you want to participate in — just like backing projects on Kickstarter and Indiegogo.
If we have music-based platforms, then it stands to reason we’d have at least one for filmmakers. Enter Seed&Spark, the crowdfunding platform for movie makers around the world. Whether it’s documentaries, dramatic films, or offbeat comedies, you can get funding for your movie, and even watch others’ contributions.
Crowdcube is another online investing site that lets investors choose which projects they want to back. It’s a great way for entrepreneurs to spread the risk of their new ventures a bit, while still getting the “grown up” funding of investors, but without needing to deal with banks and financial institutions who typically aren’t interested in smaller projects.
I like the directness of this website’s name — as if it’s a command and not just an explanation of what they do. Similar to GoFundMe, another bossy platform, GoGetFunding will let you raise funds for any cause — whether personal, nonprofit, or even a business. I saw campaigns for raising healthcare funds for Syrian refugees, helping cover medical costs for a child, and building homes in Hong Kong. If you have a worthy cause to support and people to help, GoGetFunding and GoSaveTheWorld.
Kiva is a special crowdfunding platform, and one I truly appreciate: the money raised here is not for you. Rather, you can become a micro lender to entrepreneurs and artists all over the world.
Whether it’s lending $250 to a women’s sewing group in Burkina Faso to buy sewing materials, or $2,000 to an Armenian photojournalist, you can loan a small amount to any borrower you choose, and as the loan is paid back, you can make a little bit of money in return.
Regardless of the work you want to do, the goals you want to accomplish, or the lives you want to change, there are crowdfunding platforms of all sizes, aims, and areas of focus. There are investors who want to see a return on their loans, and there are sites with the sole aim of funding creative projects or life-saving nonprofits.
Figure out your end goal, and start your research. Find a platform that will suit you and your desires, and then go all in. Don’t split up your efforts between platforms because that will only confuse people. Focus on that one platform and that one goal, and tell everyone about it, until you raise your funds.
Part of being an entrepreneur is having the drive and passion to ask for money when you need it. These crowdfunding platforms make asking for that money much easier, and even let you give your donors and supporters a little something in return.
Seems like people are also posting these types of messages in the starting your business area. When do we post here about money, or over there? Thank you
Hey @Knight_Vision thanks for the question!
If your question is specific to managing money for a business, I'd post here. If it's "how do I fund my new business" I'd post in the other board. Over time, we may find that everyone posts on one board of the other, so we'll make adjustments as the community grows. Let me know if you have any other questions.
I'm trying to grow my business however these small lines of credit don't really help. I know the larger companies are not afraid to walk into a bank and ask for $250k or $500k. Now that's what will grow a business! ...but I'm just small potatoes. Dare I ask a bank for big money like that?
I'm sure if I get a building and more vehicles for my business it would become collateral. But first I need an unsecured loan to do that. I'm guessing that they won't do that.
Taking loans may be risky sometimes, right? I am always worried about all the things and lately I took loans only from banks thinking it was safe. However, it was not convenient at all as you have to wait, your credit history should be good and you also have to prove that your income can allow you to pay debts. I have never thought of taking loans online until one of my friends suggested me to try Illinois payday loan proving that he used the company for getting money for his start up. I wasn't sure but deicded to risk after reading the info on their site. Was it useful? Yes. Was it comfortable? For sure. I am still against loans as you have to pay interests anyway, but I would prefer to take it online and fast rather than wait and think that my application may be rejected for almost no reasons.