SUBMIT
Crowdfunding success, crowdfunding, crowdfunding campaign,

What Crowdfunding Options Are Available For Your Business?

By

Jan. 3 2019, Published 2:17 a.m. ET

Link to TwitterLink to FacebookLink to Email

Crowdfunding, raising small amounts of money from multiple people, has become more popular every year since its inception. Individuals and business use this financing practice.

SCORE’s latest infographic, sponsored by Nav, details the trends of crowdfunding for small businesses and whether this financing method could work for your company.

In the US, crowdfunding has raised more money every year…and the amount is projected to grow.

  • 2016: $800 million
  • 2017: $915 million
  • 2018: $1.04 billion
  • 2019: $1.17 billion
  • 2020: $1.3 billion

So, what crowdfunding options are available for your business?

Article continues below advertisement

Reward-based

  • Backers receive an early version of a product or other rewards (Ex. Kickstarter, Indiegogo)
  • Maximum funding amount: none
  • Typical cost: 8%-10% in fees

 Equity

Crowdfunding success, crowdfunding, crowdfunding campaign,
Article continues below advertisement
  • Individuals invest in return for a company share
  • Maximum funding amount: Up to $1.07 Million
  • Typical cost: 3%-6% in fees, plus $10K-$100K in professional fees

Debt

  • Backers provide loans in exchange for interest
  • Maximum funding amount: Up to $500K
  • Typical cost: 5%-27%
Article continues below advertisement

Campaign success rates and amount raised vary by category

  • Design: 36% are successful
  • Fashion: 25.8%
  • Food: 24.8%
  • Technology: 19.9%

Tips for crowdfunding success

Crowdfunding success, crowdfunding, crowdfunding campaign,
Article continues below advertisement
  • Prepare
    • Research similar campaigns
    • Choose the best platform and funding goal
  • Pitch
    • Share your unique story
    • Create engaging photos and video
  • Promote
    • Use your networks: family, friends, community and social media
    • Update your backers frequently
  • Research similar campaigns
  • Choose the best platform and funding goal
Article continues below advertisement
  • Share your unique story
  • Create engaging photos and video
  • Use your networks: family, friends, community and social media
  • Update your backers frequently
Article continues below advertisement

After the campaign, crowdfunding success creates more benefits

  • Strong customer base
  • Greater publicity
  • Higher likelihood of external financing
  • Increased chances of business partnerships

Check out the SCORE infographic below!

Crowdfunding success, crowdfunding, crowdfunding campaign,
Advertisement

Latest Career Advice News and Updates

    Link to InstagramLink to FacebookLink to TwitterLinkedIn IconContact us by Email
    HerAgenda
    Black OwnedFemale Founder