Creative Funding Resources: What is Crowdfunding?

Pulling together start-up funding is often one of the more challenging tasks entrepreneurs face. As my father once told me: “as soon as you can prove to a bank that you have such a healthy business that you don’t need any money, they will lend you some. But, not until then.” Being the ambitious entrepreneur I am, I promptly ignored his advice thinking that surely there must be a way to get traditional lending. I’m a woman in business with a mission! There will be loans! There will be grants! I will find them! So, I never find it insulting or surprising when I coach people to look at other ways to source their initial funding and they completely ignore me. I think it’s in our blood, as entrepreneurs, to boldly attempt to go where others say we can’t – and that’s a good thing! One terrific option for creatives, artists and certain ventures is crowdfunding.

Crowdsourcing is the concept of bringing people together from the general public (generally volunteers) to unite in a purpose and more forward a goal. WordPress is a perfect example of such a project. Created by the people, for the people. Crowdfunding is a similar concept, the general public coming together and donating to help fund a specific project.

There are some terrific sites out there that enable you to do just that. Keep in mind, theses sites are built for funding specific projects, not to cover general operating expenses. But, if there is a part or piece of something you are doing that is easily sectioned off, or if you are working on a creative project, you may find this option very helpful. It’s also important to note that it is not legal to offer equity or investment opportunities through these sites – the money you get is purely donation + return perks. The charge for CC fees + project fees is typically 5-10% of the amount raised.