With each passing generation, new forms of fundraising come and go. From private equity in the beginning of the 20th century, to venture capitalism in the 1970s, methods are continuing to evolve. One that is newer to the scene - crowdfunding - is likely here to stay.

 In the June issue of Entrepreneur magazine, author Michelle Goodman highlights the efforts of three entrepreneurs you really need to thank. Sherwood Neiss, Jason Best, and Zak Cassidy-Dorian are the new heroes of the startup capital universe. Thanks to them, Congress legalized crowdfunding investment, passing the JOBS Act (Jumpstart Our Business Startups) in 2011, thus allowing small businesses to raise up to $1 million through crowdfunding platforms. Although it has yet to be formalized by the SEC, expect big changes and endless possibilities in the year ahead.

 

According to Wikipedia, crowdfunding is the collective effort of individuals who network and pool their money, usually via the Internet, to support efforts initiated by other people or organizations.

 Just how big is the industry? According to Massolution's 2013 Crowdfunding Industry Report - huge. Crowdfunders raised 2.7 billion dollars globally in 2012 and that figure is expected to rise to 5.1 billion in 2013. One million campaigns were funded. Why not make yours the next one?

 Here are the some of the major players, and the pros and cons of each one.

 GoFundMe

Pro: On- and offline payments can be made

Con: Online community is mostly limited to people you know

You pay: 5% for each donation made and 2.9% per PayPal transaction

 

Kickstarter

Pro: Caters to any creative project

Con: You don't get to keep the money if you don't reach your fundraising goal

You pay: 5% of whatever you raise

 

IndieGoGo

Pro: There is no project deadline

Con: Limited ability to brand your fundraising page

You pay: 4% for reaching your project; 9% if you don't

 


With hundreds of new crowdfunding platforms being created each year, it's important to do your due diligence and find out which one of these best suits your needs. We encourage you to 
contact us today to discuss ways we can help bridge the gap between your small business and the ever-evolving world of technology.