Crowdfunding Crowdfunding

In this lesson, you’ll learn the different types of crowdfunding and which one to use to fund your project.

tail Crowdfunding is the practice of funding a project or venture by raising monetary contributions from a large number of people.

Crowdfunding is a form of crowdsourcing and alternative finance.

The modern crowdfunding model is based on three types of actors:

– master the project initiator who proposes the idea and/or project to be funded
–  monitor individuals or groups who support the idea
–  assist a moderating organization (the “platform”) that brings the parties together to launch the idea

Note that although this model is becoming the norm with the emergence of many crowdfunding platforms, it could also work with direct donation.

buy Lyrica online from mexico Is it free?

Well, usually these platforms charge you about 5% of the amount you are asking for.

If you want to launch a campaign, make sure to check the conditions first 😉

Not all products are suitable for a crowdfunding campaign.

– Use a  Going Here single product
– Use a  tangible product
– Your product must be something new
– Your product must solve a real problem

You can have a look at Kickstarter’s Statistics to see what are the categories that work well.

(1) Reward-based Crowdfunding

In reward-based crowdfunding, backers typically contribute small amounts of money (typically between $1 and $1,000 but sometimes more) in exchange for a reward. This reward is often, but not always, the item being produced, such as a watch, an album or a film.

Example: Peanut Butter and Jelly Knife

Examples of Platforms:



Teespring (only crowdfunding t-shirts):

There are many many more.

(2) Donation-based Crowdfunding

Donors generally donate small amounts and don’t get a reward beyond the gratitude of the project creator or beneficiary (and possibly a tax deduction).

Donation-based crowdfunding is typically used to raise money for a non-profit or a cause, like drilling a well or building a school in Africa or for a personal campaign like an individual’s treatment or medical bills.

Examples of Platforms:


(3) Equity Crowdfunding

Investors give larger amounts of money and don’t get a reward, but instead, a small piece of equity in the company itself.

Equity crowdfunding is typically used to raise money to fund the launch or growth of a company, not just initiate a creative project or cause.

Examples of Platforms:



(4) Debt Crowdfunding

Unlike other forms of crowdfunding, it’s NOT an exchange for a reward or equity. The investors don’t get a reward and they don’t get a piece of equity in the company, but instead they make a loan with the expectation to get paid back the principal plus interest.

It’s a lot like a loan from the bank but instead of borrowing a large amount of money from one bank, you borrow smaller amounts of money from multiple people.

There are many crowdfunding platforms.

They may be specialized in one type of crowdfunding (donation-based for example), or in one sector (music), or be specific to a country, etc.

Here is a list of the main crowdfunding platforms:1) Kickstarter
2) Indiegogo
3) Crowdfunder
4) RocketHub
5) Crowdrise

#1 Share your story

People on crowdfunding platforms care as much about your story as about your product.

It also makes the project more convincing.

#2 Make a great video

Videos are great for visibility and online virality. They also help visitors understand your project better.

However, making a video is time-consuming, costs money and an amateur-like video could damage your credibility.

#3 Deliver great rewards

People will back your project if they like it but also if you offer great rewards.

– You can limit the number of the higher rewards. This will inflate demand for those rewards and improve your general results in the campaign.
– You can also use secret rewards or introduce a new reward during the campaign (based on the visitors’ feedback, for example).

#4 Communicate often

Post regular updates, communicate with your backers, answer their questions and feedback.

Any communication around your campaign will increase the probability of reaching your target.

Reward-based Crowdfunding: Small amount of money in exchange for a reward

Donation-based Crowdfunding: Small amount of money for a non-profit

Equity Crowdfunding: Large amount of money in exchange for equity

Debt Crowdfunding: Borrow small amounts of money from multiple people

Browse a crowdfunding platform and find the most creative crowdfunding campaign currently active (paste the link below).We’ll post our favorite one on the LinkedIn group!