One possible positive effect of this though has been an increase in the amount of alternative finance options, of which Crowdfunding is one of the most talked about – even President Obama has been backing the crowdfunding revolution recently.What is it?
Crowdfunding has been defined as “ the collective cooperation, attention and trust by people who network and pool their money and other resources together, usually via the Internet, to support efforts initiated by other people or organizations.” Generally it enables an individual or a startup organisation to pitch an idea or a project , and empowers a mass of individuals i.e. the crowd to show their support by making a financial pledge to help them raise the money needed to make that idea or project a reality.How does it work?
Although the rules vary on each crowdfunding platform, they generally all work along the same basic principles, namely:
- A user creates a profile and outlines their idea or project including how much funding they would need and also what the project time-frame is
- Listing an idea is generally free although there is a processing fee for any successfully funded projects – normally around 4-5% of the total sum raised.
- The amount of funding that can be asked for can vary from a few hundred pounds up to £25000 on some platforms
- Most sites operate on an “all or nothing” principle whereby if the total target is not reached, the project does not get any funding.
- Many sites ask for the idea innovator to in some way “reward” the investor which can mean anything from receiving some branded merchandise through to getting credits on an album sleeve.
- If a project is not seen through to completion, investors have to be paid back.
There are countless crowd-funding sites now available and more are being created all the time. Some are more geared towards the arts and creative sectors specifically whilst others are more general and suited to all types of entrepreneurial endeavour. If you think this might be an option worth considering for your own particular idea, it is worthwhile taking some time to fully explore the various platforms available to see if it is the “best fit” for your own idea. We have highlighted here some of the main crowd-funding sites that we think you should check out .
Although not yet supporting any UK based projects, Kickstarter is probably one of the best known crowdfunding platforms for creative projects. They have just this week announced that they have more than 1 million people backing at least one project and are getting around $2million pledged every week.
The UK based site, Crowdfunder is always on the look out for talented people in the UK and Europe who need funding to kick start a project – anything from food to photography, fashion to film or art to an extreme adventure.
IndieGoGo is open for anyone to use, anywhere in the world, with any type of campaign — creative, cause-related, or entrepreneurial. With IndieGoGo you can turn your passion into a funding campaign, promote your idea, engage a fan base, and get funded. They provide all the tools you need to build a campaign and share it with the world.
Sponsume Crowdfunding is another UK based platform which considers both creative projects as well as new business ideas, new products, charity events, exhibitions, concerts, balls, new albums, documentaries, films, sporting events, classes and conferences. Sponsume Crowdfunding is slightly different from some of the other crowd funding sites in that they ask you to buy ‘vouchers’ which act like pre-orders for the product or service which will be produced when the project goes live. Connected to each ‘voucher’ are discounts and rewards related to the new project. You would offer these to attract supporters and they might be a discount on the finishal and, ultimately, persuades them to offer financial support.
Invested.in is available to everyone everywhere and claim to be truly putting the future of the community into the hands of the community, and out of the hands of the traditional banking and credit card sector.
Originally an Australian platform, a UK version of Pozible has now been launched. It is a crowdfunding platform and community for creative projects and ideas. It has been developed for artists, musicians, filmmakers, journalists, designers, social change makers, entrepreneurs, inventors, event organisers, software developers and all creative minded people to raise funds and realise their aspirations.
Fundit is one of the first crowdfunding platforms targeted specifically at Ireland’s creative projects. This all island site covers Irish based projects and ideas although funding can be done from anywhere in the world.
If there are any crowdfunding platforms that you think we should have included on this list, please let us know and we will add them. We would also love to hear any good news stories about successfully funded projects. Please use the comments section below and keep us posted!