I just learned about crowd funding about 3 months ago and it sounds like an excellent idea. Now for the first time one can fund or fund seed financing for any idea without having to be a non profit or get real investors.
Here is what crowd funding is in a nutshell: Imagine standing in front of a huge crowd of thousands of people on a stage and yelling out “Does anyone have a car I can use!” and some one raises their hand, that is “crowd sourcing”. “Crowd funding” is a similar idea but instead of asking for a car you yell out “Hey I need $500 for a camera to film a new movie!” and someone raises their hand. In exchange the “investor or donor get a thank you gift of some kind like an autographed poster etc. Now imagine that crows is in the virtual world of the Internet and you have crowd funding via facebook, twitter etc.
I have been doing crowd funding in the real world for my film Star Kids for sometime now with limited success and I think that limit is because I have not been able to use social network effectively to create a viral effect with my fundraising. In the real world I am pretty much limited to the people I make direct contact with. But in a viral social networked world, it’s the people you make contact with and the people they make contact with and … you get the idea.
These new crowd funding sites can help you take better advantage of the viral aspect of social networks. At first I was totally confused about what crowd funding was, and how it worked and which sites offered the best tools to help you achieve your fund raising goals. Because we only have so much time and I don’t have time to invest in a bad site. So here are the results of my research. I have yet to actually raise money with these sites but when I do I will update you. If you know of any pother crowd funding or sourcing sites please let me know as well as your comments and opinions on the matter.
No 1. Indiegogo.com
Facebook fans: 4000
Fee: 4% to 9% (if you don’t reach your funding goal)
Seems to have a good track record, many independent films have been produced on this one and gone on to Sundance and other high profile festivals. The seem to give you lots of freedom to do what you want. Looks like any project can be funded here, uses paypal, has lots of fans on facebook, is film oriented. You can still get the funds even if you do not reach your fundraising goals but you pay almost double in fees. This is my first choice and the one I plan to use for my projects.
No. 2 kickstarter.com
Facebook fans: 12,000
This site was one of the first on the crowdfunding scene. They seem to be very new York oriented and I feel they try to exert too much control over your project. They seem to prefer very creative artistic projects. To me they seem to be very New York Artsy oriented if you know what I mean. Your project must reach the funding goal to get funded otherwise all funds go back to donors. I am not sure about this all or nothing approach. You might spend a lot of time and work to fundraise and if you are just a little under your goal it’s all for naught. There is No Paypal connection so getting funds is more complicated. I think they mail you a check at the end of the funding period if you reach your goal. Also only payment service they work with Amazon and takes 14 days to get the funds. I even suspect the lack of Paypal might mean this is an Amazon funded company.. So given all of that I say this site is a second after Indiegogo. But, donors might like this better precisely because the funds are not released unless the goal is achieved. So in the end you might actually raise more money with a site such as this but again it’s a risk.
No. 3: Gofundme.com
Been around 9/mo.
Facebook Fans: 78
This site seems too new and does not have enough followers but the software tools on this site look like they could really help with your fundraising efforts especially via facebook and twitter etc. One good thing is this site is not film oriented, looks like you are free to try to raise funds for any project you can think of.
No. 4 invested.in
This site is very new and seems to be in a beta stage of development. They don’t seem to be funding many projects right now. Invested In seems cool and it looks like it has lots of promise but most of the project are not getting funded right now so either it’s too new or it just doesn’t work. We’ll keep an eye on it though. It looks like it’s great for connecting to social networks like facebook and twitter which I think is key to crowd funding properly.
Other Crowdfunding sites
During my research I discovered these crowdfunding sites but I have not had a chance to check em out so I can’t rank em yet.
Kapipal is a service to easily collect money through the Internet.
RocketHub is a community for Creatives by Creatives. We are a purely indie outfit, not backed by any venture or corporate money. RocketHub is accountable to you, not bankers or the old guard. Crowdfunding is the foundation of the New Creative Economy and that a new power now rests in the hands of the Creatives. This is a grassroots movement for funding creativity. Welcome to the crowdfunding revolution.
Buzzbank is an online marketplace connecting social ventures from all walks of life with backers, supporters and fans. At Buzzbank, we believe together we can make good things happen by supporting and/ or lending to social ventures, innovating and changing the world for the better.
Crowdfunding creative projects and ideas. UK’s Crowdfunding platform developed for creative individuals, groups and organizations.