If you’re tired of the same offers all the time and are looking for new, innovative and interesting tech and other products on the market, then there is one special place you’re probably missing. The answer is simple: crowdfunding.
In this article, we cover what is crowdfunding and how it works, as well as suggest some cool innovative products to check out at the end.
Chances are, you’ve come across crowdfunding ventures on your own social media pages. Whether it was someone raising money to fund their education, surgery, funeral expenses, or a cause that they are passionate about, people use crowdfunding every day to raise money for a particular cause. It is an innovative way in which people will be able to raise money from a large audience and use that money to fund specific projects. There are plenty of websites out there that allow people to hold these types of fundraisers in a creative manner.
How Does Crowdfunding Work?
There are several different types of crowdfunding, but the two most popular are reward-based crowdfunding and donation crowdfunding.
This is what you will find on websites such as Kickstarter and Indiegogo. Basically, people will donate money to a cause where they will receive some sort of benefit. For example, on Indiegogo, one of the most popular projects at the time this article was written is for funding the costs of a revolutionary blow dryer. People who pledge a certain amount of money will receive a complimentary blow dryer- the more they bid, the more blow dryers they receive. Those interested in backing the project will choose the package that they are the most interested in, provide their financial information, and receive the package later on. The platform will take a small percent of the fees raised, but the rest of the money will be disbursed to the project owner.
This is a similar idea to the above, but people do not get a reward for doing it. This is something that you would most likely find on GoFundMe. Donation crowdfunding is when people raise money for a certain cause, such as disaster relief, medical funds, education expenses, and more. The person raising the money will set a goal for how much they want to raise, describe what they are raising it for, and will share the fundraiser across different platforms. People simply select or input the amount they want to donate. The site takes a small fee from the donations and the rest are disbursed to the project owner.
Top Crowdfunding Websites
Nowadays, there are so many great crowdfunding platforms that one can use to fund their innovative projects or fundraisers. Here are some of the most popular.
Best for Entrepreneurs
Kickstarter and Indiegogo
Best for Creators
Patreon (This is a crowdfunding site that is most popular among online influencers. Someone pledges a certain amount of money every month in exchange for art or another service, such as free products, signed photos, etc.)
Best for Fundraising
Best for Business Loans
LendingClub (This is a way for entrepreneurs to conduct debt crowdfunding in a manner that’s a lot easier than taking a trip to the bank.)
Indiegogo vs. Kickstarter
Indiegogo and Kickstarter are listed among the best crowdfunding sites for 2020 and they surely live up to their fame. They both work well, especially for those who want to gather funds for a special project. Let’s look at the differences and similarities between the two sites.
This site is most commonly used for community projects, creative innovations, and other entrepreneurial ventures. You have the option to choose between fixed or flexible funding. Flexible is a good choice if it doesn’t matter how much you raise, but fixed is better if you need to reach a specific goal. Donors will have their funds returned if you don’t reach the goal with fixed funding, but you will receive the money no matter how much was raised with flexible funding. You need to have a minimum goal of $500. There is a processing fee of 3 percent and 30 cents for every transaction. In addition, if you do not meet your goal, there are no fees, but there is a 5 percent fee for those who do meet their goal with either type of funding.
Kickstarter is also a great site for entrepreneurs to fund their ventures. It’s easy to use- all you need to do is set a goal, when the project needs to be completed by, and wait for your project to be approved. You also need to provide some sort of reward for those who donate. Unlike Indiegogo, if you don’t meet your goal on Kickstarter, you won’t receive your funds. There is a 5 percent fee in addition to the 3-5 percent fee per transaction.
Top Crowdfunding Products for February 2020
And finally, here is our list of the top crowdfunding products for February 2020 that we think are worth supporting.Read Less