How can crowdfunding help you raise capital from your community?

On this post you will discover:

  • What is the crowdfunding?
  • Identify the correct crowdfunding platform for your project
  • Identify the fee charges within crowdfunding platforms
  • Know the general crowdfunding process to raise money

Understanding the concept of crowdfunding

In the era of Tinder and twitter we should not be surprised to see emerged digital platforms focused on helping entrepreneurs to raise capital to fund or inject money to their projects without loans but by connecting them with a community of people ready to aid or invest on them.

If you are a designer, a creative or simply an entrepreneur with an innovative project, you are the primarily reason of why these financing platforms were created.

To understand better the concept, we can separate the word crowdfunding in two parts:

Crowd     and     Funding

Hence crowdfunding is a collective funding. Do you remember the saying ‘If I had 1, 000 000 friends I will ask each of them 1 dollar and I will become millionaire’? – the collective funding can make it happen or at least help your business. Basically, anyone with money and interest for your Project can help funding you.

In some of them you can trade merchandise for the funding you receive. I’ve seen from certificates to sample products; this depends on how much money is the person willing to give.

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The most popular platforms in Mexico

The platforms that facilitate these transactions often charge a commission, some of the most popular crowdfunding platforms (and the characteristics of the projects supported) are:

  • Kickstarter, focused on raising money for creative projects like apps, libraries, manufacturing, books, films, and other creative categories. If your funding is successfully funded the fees will be collected from the funding total, including:
    • Kickstarter 5% fee
    • Payment processes fees
  • Donadora, a Mexican crowdfunding platform created to Support projects with social impact, humanitarian, or business projects. If your funding is successfully funded the fees will be collected from the funding total:
    • Donadora 6.5% of the funding total + Taxes (IVA)

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The process to raise money on a crowdfunding platform is:

  1. Select a platform.
  2. Fill your registration on their website.
  3. Start a campaign (each platform will guide you through the process)
  4. Share the campaign link and promote it with your family, friends, or social media platform to create awareness on your project.
  5. Raise money online.
  6. Receive your funds. **

What happens if you don’t fulfill the set funding goal? **

  • Kickstarter you should reach the goal to receive the funds. In case of not meeting the goal the fees and the money won’t be collected from any funder.
  • Donadora: In case of not meeting the goal, the platform does collect the fees mentioned before and your project can receive the remaining amount.

Raising money should not be an issue to stop you from funding your project when taking into consideration these options. Work on your project, prototypes, or videos to showcase on your campaign.

Are you ready? Or have you tried funding a project? Let us know! And share this post with your business community to strength the local economy.