Reading Michael Arrington’s articles I have a good understanding of funding, angel investor, Silicon Valley, seed funding, funding rounds, investor, IPO, fund-raising and venture capital like terminologies are not new to me. My today’s article is about crowd funding.
Crowd funding is a little different, to invest in something you don’t need to be rich. You can invest as little as $5. This same applies for the fundraiser, the fundraiser can ask for as little as $5 because you are crowd-sourcing. Investment and crowd funding is not strongly related to tech-startups. Sometimes you don’t invest only to get your money back with some profit but you just give it and get only gift in return. If you have no idea what I am talking about, keep reading this post.
There are many websites; these websites give a platform for both the fund-raiser and the investor. There is a slight different between crowd funding and microfinance. Microfinance services are for poor villagers.
Some projects need only $2000, $10,000 or $40,000; this amount can be different, this depends on the project. After seeing many projects I can say there is still humanity left in humans. If you have a good idea and want to give it a shape many people will help you to complete your project.
Now see where you can ask for crowd funding. There are no specific areas of crowd funding. And crowd funding is different from IPO (Initial Public offering). By visiting crowdsourcing websites you can get an idea if you need to crowd source your project.
Kickstarter is the most popular online platform for crowd sourcing. It’s a funding platform for creative projects. On this platform you can find many projects competed and running. For example I took a project “The Golden Hour Documentary”, it’s a completed project. You can see how many backers have funded this project and how much has raised, who and why started this project.
You can browse some of the projects to get better understating of the projects and how these projects work. If a project’s required funding is not completed the project will be cancelled and the funded amount will be returned to backers. To get the required funding you get 30 days or reach the 100% funding you get 30 days, if your project achieves this goal before thirty days; new backer still can fund to your project and your project can get more than 100% fund. There is also a minimum amount for funding to start and complete the project. For example you need $8000 for a project but if you get only $7800 then still you can continue to work on the project if you think the amount is enough. These projects are crowd funded so a single person can’t fund the full project.
You can browse projects from different cities and categories, categories have sub categories. You can find these categories on Kickstarter: Art, Comics, Dance, Design, Fashion, Film & Video, Food, Games, Music, Photography, Publishing and Technology.
With every project you will see some similar information:
A website about the project, it can be on a top domain or on a website platform as Tumblr or WordPress
A video explaining the project
A detailed written description of the project
Complete bio of the project starter, it can be a company or a person.
Instruction for funders
List of all the backers
A section for comments on the project
Should you start crowd sourcing?
If you are an expert in something and have proper insight what you want to do and you believe that if people will like your idea and your idea should go to public. But you don’t have enough capital to accomplish it. You can look for crowd sourcing. If people will like your idea they will give fund to complete your project.
In this article I have shared only my views and knowledge; I am not an expert of this topic. So the provided information may be incomplete.