Crowd-funding has been embraced as a great alternative for raising money projects, ideas and existing businesses. Popular crowdfunding sites include Kickstarter, GoFundMe, Wefunder, Start Some Good, Rocket Hub, Rock the Post and Indiegogo are a new way for entrepreneurs to raise capital for businesses and projects.
Projects funded through sites like Kickstarter are posted with a financial goal and timeline. People make pledges for projects they want to support. When projects reach their financial goals, they are funded. You can start your crowdfunding project for free popular sites like Kickstarter, you will only be charged when your project has raised funds or the full amount. Crowdfunding has proven to be great for publicity.
Crowdfunding has recently received attention from policymakers in the United States with direct mention in the JOBS Act; legislation that allows for a wider pool of small investors with fewer restrictions. The JOBS Act awaits implementation this year.
The infographic below shows how crowdfunding works, successful crowdfunding sites and projects, the pros and cons of crowdfunding versus venture capital and why crowdfunding works.
Image source: www.bestaccountingdegrees.net
