Wednesday, April 11, 2012

Need Project Funding: Consider Crowdfunding

Bob Ewing - Eureka, a vivid image pulls you from your sleep. You have found it, finally, the answer to the concept you have been worrying over for the past three months. Grabbing pen and paper you quickly jot it down and then go back to sleep. The next morning, in the light of the day, you read what you wrote and it still stands up.

Over the next ten days you refine your idea, focus your research, and the end result is a project that you believe will succeed.

Now you need to find the money to bring it to the market, however, the bank is not interested. You lack collateral or experience or are simply too small for them to care.

What do you do? Approach family and friends, give them a solid presentation and ask them to fund the project. Could work, but what if you are uncomfortable with that approach, what can be done?

Well, just a few years ago, your only viable option may have been to put that perfect plan on the shelf and hope for better days. This is no longer necessary.

Crowdfunding provides a way projects can get the funds they need to become reality. Crowdfunding uses social networking to raise money from online friends for your project. The number of crowdfunding sites is increasing and may grow larger, at least in the United States, due to recent legislation.

Crowdfunding allows the project developer, be it an individual or a business or organization, to appeal directly to people, and ask them to contribute small sums, (often $5-10) to bring a project to realization. The transactions, often take place through Paypal and the funds are not forwarded to the project developer until the total financial goal has been reached. If the goal I not achieved the funds are returned to those who donated them.

Different crowdfunding sites have different rules and guidelines so it is best to do some research and pick the site that best matches your need and project.

Social networking sites, such as Facebook and Twitter, play an important role in getting the word out and informing friends about the project. The more adept you are at using the social networks the better you odds are.

It does not hurt to have a short video that explains simply why you want the funds and what you are offering as an incentive to those who provide them. Some sites require a video, other recommend one, Incentives are not always required, and do vary, so do your homework before launching the project.