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Crowdfunding for Beginners: 4 Sites to Get You Started

posted Aug 6, 2014, 12:14 AM by Siamak Ebarhimi

The rise of social media has given us a gift in the form of crowdfunding. If you’re not familiar with the concept, crowdfunding is the raising of funds from a group of people (the crowd), usually online, to back any imaginable project, product, or cause you can imagine.

It is now the way for businesses to make it big from scratch. In 2013, Forbes estimated that crowdfunding collectively raised $5 billion worldwide. The numbers keep growing yearly, and these are a few of the biggest sites to check out if you want in on the fun.

1. Kickstarter

What is it?CrowdFunding advertizing

Kickstarter arose as a means to leverage crowdfunding for the creative crowd. Since it started up in 2009, it’s managed to raise over $1 billion for over 65,000 projects covering everything from art projects to movies and videogames.

How does it work?

Users browse through a number of project categories like the ones mentioned above. Creators set monetary levels for their backers to pledge at. Usually, these levels offer different levels of rewards. For instance, an entry-level supporter of a videogame project may simply get a copy of the game when it comes out. Someone who pledges more money might get the game and exclusive merchandise to sweeten the pot.

Creators have total control over their projects. Assuming they hit their set funding goal, creators receive the funds minus processing fees, and backers get their rewards when the project is complete.CrowdFunding marketing

2. Indiegogo

What is it?

If Kickstarter is the means to an end for creative types, Indiegogo is the platform for the rest of us. Begun in 2008, Indiegogo has managed to raise over $700 million for projects from building solar roadways to helping feed the homeless.Kickstarter Marketing

How does it work?

The biggest difference people will note between Indiegogo and Kickstarter is that Indiegogo has no guidelines. Anyone, anywhere, can start a project for anything. For lack a better term, Indiegogo is a catchall crowdfunder.

The other major difference is that Indiegogo offers two types of funding goals, fixed funding and flex funding. Fixed funding is like what Kickstarter offers: Projects set a funding goal, and if that goal is reached, the project moves forward. If it isn’t, back to the drawing board for you! Flex funding works much the same with a big caveat: even if the funding goal isn’t met, creators can keep what they manage to raise. The big difference is that fixed funders pay no fees on failed projects; flex funders do.Indiegogo Marketing

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By David Khorram