All about crowdfunding, types of crowd funding, how to be successful at raising funds from crowd

All about crowdfunding brings to you all you need to know about crowd funding.

1. What is crowd funding?

As suggested by its name, crowd funding means raising funding for your business or projects, outside of stock market, by receiving lots of small investments/donations from masses instead of a few investors like banks/angels/VCs/institutions.


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2. Is it legal?

In some parts of world (mainly western capitalist countries), authorities have published guidelines on how to go about it, till their law makers catchup with this new phenomenon and  make proper regulations around it.

3. Types of crowd funding

Equity Crowd funding:

Usually an already trading SME business with some profits/revenue/turnover to show on its books goes for this type of funding. Investors get proper legal shares in the business/company raising the funds. Since it involves legal paperwork & guidelines to be followed, hence it mostly suits to seasoned  entrepreneurs and seasoned investors. Donations can be as small as $50 to as big as $10000.  People who invest, usually have to sign a declaration that they know all about investments in volatile businesses and may loose money as an outcome. Upon successful funding, legal paper work is drawn to allocate shares to investors. Platform's cut and legal work fees are a significant deduction in this method.

Some popular platforms out there are:

Donations & Perks based crowd funding:

Just like plain old donations page on web for freeware software, in this type of crowd funding, people list their ideas/prototypes as projects or campaigns and ask for funds from the public to complete their project or deliver the idea into real world. Campaigners normally offer perks/givebacks to encourage donations from the visitors to their campaign page.  Campaigners usually get to choose between Fixed Funding and flexible funding models.

Some popular platforms out there are:

3.Stages of Donation based Crowd funding

3.1. Planning for your crowd funding campaign

We highly recommend that you take planning of your crowd funding campaign very seriously and read as much as possible on net about it. Here we have compiled a good article to help you start the planning phase: 

3.2. Creating your crowd funding campaign

Much more than your university project or thesis, a crowd funding campaign is a real world test of your convincing and marketing abilities to get people to donate you their hard earned money. A lot of creativity goes into creating one like graphics, youtube videos, creative perks etc. here we have compiled a good article to help you create an awesome crowd funding campaign: 

3.3. Running and promoting your crowd funding campaign

Planning and creating a crowd funding campaign is only 30% of the total task in hands. The real test comes how good you are at promoting it. Thanks to internet, email and social media, all it takes these days to promote a campaign is genuine creativity, low cost online marketing which you can probably do yourself and keeping your campaign page updated with lots of creative posts every other day. Keep the excitement level up and respond to every Question asked of you on your campaign page. Find a lot more tips and tricks at a beautiful guide we have compiled here 

3.4. Activities you should do after running a successful crowd funding campaign

Now that you’ve finished your campaign, and celebrated its success with your closes ones, its time to deliver on promised you made. Focus on delivering the givebacks you promised during the campaign and more important than that execute your project/idea for which you campaigned. However, don't just forget about your campaign page as it will still be receiving lots of hits as a result of your social media campaign. What to do with your campaign page then?  find out answers to this and many other questions in this guide here 

Wishing you all the best, and successful funding! Go tiger, follow your dreams! :)

last updated: 14/06/2014

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