There are fundraising websites where people can easily raise funds for their projects or business ideas from a large number of people especially those that have an interest in the proposed business and they are known as crowdfunding websites.
Crowdfunding websites have gained recognition after being a medium of raising billions for businesses.
Raising capital to start off your business or project could be one of the hardest parts. Most people usually have lots of business ideas but the execution is the problem because this is where it boils down to funds.
Third world countries like Nigeria and other African countries are not left out of this situation it is quite harder to get capital to finance your business and that is why the ease of puttng up a business in Nigeria is very low.
Due to this problem, most startups even die off before the second year. Then if you decide to apply for a loan it becomes worse due to the stringent loan requirements that will put you off.
Most of the banks who don’t bother giving out a loan to a startup without providing collateral because they are not sure of the business yet.
The other options like beating your ideas to investors or venture capitalist or even angel investors but the problem is getting approval which is difficult to get.
Most times in Nigeria for you to reach an investor requires a whole lot of connections. most venture capitalists who just look at you with disdain because of lack of track record I thought even considering that some business ideas are unique and stand out.
Perhaps, you find yourself in the box without knowing the next option to get funding for your business or project I probably should consider going for crowdfunding through these websites.
Crowdfunding platform is basically getting financial support from lot of people who decide to invest in your business ideas and help you achieve it.
How Crowdfunding functions
This is how crowdfunding works: when an individual source for funding to start his project or a business and submitted to a crowdfunding website. While listing his project he also lists the amount of money he needs for it and the deadline for the fundraising.
And different people on the crowdfunding website would see the project and if they have an interest or find it worthy they would click the donate button to support you but if they don’t they will skip it.
When the fundraising deadline elapses, the total money accumulated will be given to the project creator to kick-start his project.
If by chance you’re wondering how people would just support a project they see on the crowdfunding website, here are the reasons:
• People love being part of a big idea or something that will change the world
• You give them the opportunity to become the first people to know about the project
• there are some incentives being offered by project creators to encourage the fundraisers like caps, customized t-shirts and this depends on the amount donated.
• First fundraisers tend to get access to the launch event or meet with the founders.
• This might give them the opportunity to have a big share of the business.
• Helping to raise funds for a huge project gives them an impactful credit on their portfolios.
• Also there are very nice people out there who don’t mean you bad and they want to help your dreams come true.
How Crowdfunding sites make money the crowdfunding site make a lot of money just by keeping a percentage of the money being raised for businesses. Does this percentage is usually 5% or lower but if you use an escrow service it might reach 10%.
Crowdfunding sites make a lot of money for instance in 2015 a total of $34 billion Dollars was raised from crowdfunding.
Crowdfunding websites out there how many and they have different rules and charges, though what they have in common is the same structure.
Just submit your project, name the required amount, and add a deadline.
In addition to that you should actively seek support from your friends and family on social media.
Just know that whatever project you’re looking for to fund no matter the niche you can easily accomplish it through crowdfunding website.
Here are some crowdfunding websites you should consider:
Gofundme is a popular crowdfunding website that allows individuals and charity causes to raise funds but this is a different type of crowdfunding platform because it is not particularly suitable for business purposes.
This platform is most suitable for individual projects on community projects for example seeking for Justice of George Floyd’s murder which has led to protest in the United States people have created a gofundme account for him and currently, the funds are up to $5 million.
This is a crowdfunding platform that is most suitable for philanthropic causes and it is free to use the platform do they are charges per donation.
Kickstarter is the most popular crowdfunding websites for business. It has funded over 1/50000 projects and has raised more than $4 billion.
Indiegogo is the popular crowdfunding website that allows you to get the fund you’re seeking for whether you meet your goal or not unlike Kickstarter where you lose the funds if you don’t meet up to the target goal before the deadline.
This is one of the best crowdfunding websites for entrepreneurs because it gives the opportunity to raise funds from accredited investors. There are over 12000 venture capital and angel investors on the platform.
This is a crowdfunding platform in which 18 raising funds for internet creators like YouTubers musicians programmers and others from their users.
This is a crowdfunding platform in which raises funds for internet creators like YouTubers musicians programmers and others from their users.
In conclusion, crowdfunding websites are the best way to raise capital or funds for your ideas. So if you have great ideas without having the money to back it up you should consider getting on one of these platforms.