claims to be focused on raising money for your business. This appears tobe the only site involved in businesses outside of just creative arts projects. That beingsaid, they claim not to be selling ownership shares but rather selling a portion of revenuesover a fixed peri
od (we can argue about whether or not that is still a “security” under the
you can contribute money in return for rewards or perks. No offers of equity or shares of ownership.Kickstarter
you can pledge money in return for a reward. Rewards are typicallyproduced by the project itself
think, if they were raising money to make soup, you’d get
focused on the creative arts. No equity investments.Spot.us
geared towards journalists.
Open source project pioneering “community
geared towards funding music artists. Investors get no rights in the endproduct. In return, you get music or signed merchandise.Artist Share
geared towards music arts and funding recording projects in exchange foraccess to the creative process. This site appears to be the oldest, dating back to 2003.
I’ve had a few entrepreneurs recently ask m
e whether or not crowdfunding is an alternativefinancing route for start-ups. Crowdfunding certainly appears to offer an alternative to raising afew thousand dollars from friends and family. And if not an alternative, maybe simply a way toaugment a friends and family round.
Although the average dollar amounts raised aren’t very
high, they still might be sufficient enough to put towards some market research, early conceptexploration, product samples and the like. Beyond the friends and family round, I am not surethat the current crowdfunding models could support the significant dollars that an emerginggrowth stage company might need.
In addition to not supporting the dollar level, you’d lose out
on the advantage of raising money from committed partners with experience in buildingcompanies and that can provide additional resources (i.e., contacts, connections, advice) aboveand beyond simply writing a check.That being said, if you want to try crowdfunding a friends and family round, or just match someother friends and family money, then my first suggestion would be to stick with the sites thatoffer rewards or perks in return for a contribution (out of all the sites above, only 33 Needs,Catwalk Genius and Profounder appear to go beyond rewards and perks and get into ownershipor revenue streams). Of course, this assumes that your business model allows for a reward or aperk. But be creative! You could turn anything into a reward or a perk. Why do I suggest thatyou stick with sites just offering rewards or perks? Here are a few reasons:
You Want to Avoid Selling a Security