In this ever-changing world, which is increasingly globalized and interconnected, there are many great new ideas to make it a better place. Today, we have more financial options to develop projects set them off on a more feasible path. Requesting a loan or investing all of our capital is increasingly a thing of the past, thanks to crowdfunding or collective funding. But, what is it?
Crowdfunding is a collective cooperation where anyone can contribute money to support a cause promoted by individuals or organizations. The Internet is the most common means to do this, which allows for minimum loan cost compared to banks.
An endless number of websites are today devoted to this kind of cooperation, becoming a powerful source of help for entrepreneurs, activists or people looking to support a good cause. Likewise, there are several kinds of causes or projects looking for funding through this method, including charities, personal endeavors, professional causes, and even startups.
But, how does crowdfunding work?
According to the Universo Crowdfunding website, these are the steps to create a collective cooperation campaign:
1. Submit the project or cause. The entrepreneur/interested party in raising money needs to submit the project on the website, detailing the description, necessary amount, crowdfunding period, photos and/or rewards (if any).
2. Project or cause value. Some projects or causes are valued in a community manner, while others are valued by the website.
3. Period for web publication. The project remains published for a given period of 30, 60, 90, 120 days.
4. Promotion and spreading. It is promoted to the fullest extent possible, using the social networks, mass media and offline activation.
5. Termination. The period terminates and the goal is evaluated for achievement: the project or cause has or has not been funded.
Success cases
Two campaigns that got a large fundraising for the funding of their ideas in 2015:
A smartwatch capable of managing calls, emails, recording the user’s steps and sleep patterns. This campaign raised over 20 million dollars on KickStarter with almost 80 thousand contributions.
Flow Hive, a new way to harvest
Indiegogo’s number one campaign in 2015. An innovative way to harvest honey without disturbing the bees or risking getting stung. “Turn on the tap and clean honey will flow from the hive to your bottle”,- this was the description used for promotion on Indiegogo. 13 million dollars were raised.
Top 5 websites for crowdfunding*
1. Go Fund Me
2. KickStarter
3. Indiegogo
4. Teespring
5. Patreon
What are you waiting for? It’s time to start!
* This list is based on independent traffic data found on the following digital marketing websites: Alexaand Compete.