Opportunity for your woman-owned start-up business is just a website away. We are awash in opportunities, thanks to “crowdfunding” and the government’s approval for the practice of crowdfunding in the United States. Have you heard about this? If not, you could be missing out on a great way to find financing for a new product, business or creative endeavor.
Congress and President Obama enacted the JOBS Act, which includedcrowdfunding provisions, in April. Crowdfunding basically entails asking a crowd of people to donate money to your project. There are a variety of crowdfunding websites where you can submit your proposal that outlines your project, your deadline, what rewards you may offers to your donors, and your fundraising goal amount.
Benefits of crowdfunding
Small investments work: The great thing about crowdfunding is that it can make it easier for women-owned businesses to find money. Instead of requesting thousands from a few wealthy contributors, you can draw small amounts, potentially as little as $1, from a large number of people. Because the donations can be much lower, people are more willing to support you.
Low-risk for donors: Crowdfunding is relatively low-risk for donors. For one thing, they probably don’t have a large chunk of their savings involved. On many crowdfunding sites, if you fail to meet your fundraising goal by your deadline, the donations will revert back to the donors. This means that if they support your effort, but no one else does, they won’t lose their money. Some sites do have a “keep-it-all” model where creators get the money either way, so it’s important to read the guidelines before participating.
You still own your work: The big perk for you is that unlike traditionally large investors, these people really are donors, rather than investors. They will not be financially rewarded, nor will they own a stake in your business or product rights. That will belong to you. Many websites offer opportunities for you to offer a reward to donors – most often that will be a copy of the CD you made, the toy you invent or something of that nature.
Where to find crowdfunding opportunities
We’re awash in crowdfunding sites just now. There are a variety of platforms available, but here are a few you might consider.
Kickstarter: This funding platform is for creative projects – films, games, music, art. The site launched in 2009, and more than $350 million has been pledged by more than 2.5 million people. A look at statistics on the site shows about 44 percent of projects are successful in their fundraising goals.
RocketHub: This international community has helped thousands of artists, scientists, entrepreneurs and philanthropists raise millions of dollars. If you want to proceed cautiously with crowdfunding, this is probably one of the safest sites to use. RocketHub actually testified to Congress about crowdfunding and has since also published a whitepaper about the future expansion of crowdfunding in the United States. Alon Hillel-Tuch, founder and CFO of RocketHub, believes “social funding is going to dominate the online space for the next five years,” according to a Forbes article.