When beginning a crowdfunding campaign, it’s important to evaluate your network and establish exactly who will make up your base of support. The success of your crowdfunding campaign will largely rest on how effectively you communicate your launch within your various networks. Once you’ve identified a group of potential backers – it’s also important to structure your rewards tiers in the most compelling way possible. Take into account what is most interesting to your group of potential backers and structure your rewards tiers in the most compelling way possible.

Your network can be divided into four main groups: friends, family, customers, professional contacts, and audience.

Friends

Your friends include those you see on a regular basis.You...

Crowdfunding at a glance

Crowdfunding is a method of raising capital through the collective effort of friends, family, customers, and individual investors.

This approach taps into the collective efforts of a large pool of individuals — primarily online via social media and crowdfunding platforms — and leverages their networks for greater reach and exposure.

How is crowdfunding different from other types of finance?

Crowdfunding is essentially the opposite of the mainstream approach to business finance. Traditionally, if a person want to raise capital to start a business or launch a new product, they would need to pack up their business plan, market research, and prototypes, and then shop their idea around to a limited pool or wealthy indiv...

Startups and venture capitalists are so closely linked in the tech world that it can be hard to think about one without the other.

We certainly wouldn't have our tech giants, like Facebook or Twitter or basically any other startup-gone-big you can think of without VCs. But, finding and getting venture capital for your startup can be daunting. Where do you start? How do you start?

Don't fret — we've got you. Keep reading for more information on how to get venture capital funds for your startup.

Before we dive in, let's make sure we understand a few terms:

VC Funding

VC funding is the process in which a company or individual invests money into a business in exchange for equity. This type of investment is most commonly used by startups and small b...

Crowdfunding is a method of raising capital through the collective effort of friends, family, customers, and individual investors.

This approach taps into the collective efforts of a large pool of individuals — primarily online via social media and crowdfunding platforms — and leverages their networks for greater reach and exposure.

Sounds great, right?

But because this method is relatively new, many people don’t understand exactly how crowdfunding works.

Simply stated, crowdfunding works by presenting your idea to people inside and outside of your network and allowing them to contribute toward your fundraising goals online.

Who is the "Crowd" Anyway?

The crowd is essentially your personal network, potential customers, and — in the case ...

As Startups.com and Fundable founder Wil Schroter likes to says, “There’s not a lot of ‘fun’ in funding.”

Raising equity funding for your startup is a long, difficult, and often demoralizing process. However, if you’re successful, you walk away with money that will help your startup grow and become everything you hope it could become.

But despite these challenges, thousands of startups raise funding every year, implying that the potential rewards outweigh the guaranteed strife and risk. Here’s an outline of what a startup founder can expect at each startup funding stage.

Pre-Seed Funding

Pre-seed funding is the earliest startup funding stage, so early that many people don’t include it in the cycle of equity funding.

At this stage, founders...

Crowdfunding is not only a popular strategy for getting a product or startup off the ground, but also an increasingly viable one.

New legislation lets startups raise capital from the general public. Companies can now receive up to $1 million from non-accredited investors, prompting many businesses to enter the arena and, ultimately, attract more issuers.

What’s more, equity crowdfunding companies like Fundable make the process really easy for companies to raise money on their platforms, which has led to a big expansion in the space.

If you want to reach and inspire the crowdfunding community, video is a great medium. In fact, campaigns that utilize video crowdfunding pitches garner four times more funding than those that don’t.

While the in...

Congress passed the Jumpstart Our Business Startups (JOBS) Act way back in April of 2012 — and the startup world rejoiced. Finally, we’d be able to raise money through non-accredited investors, just like all of our friends were doing to pay for their EPs and trips to South America and medical procedures! Crowdfunding — which the startup world invented — was finally a legal option for startups.

So what’s so great about the American JOBS Act, anyway? The ability to raise equity crowdfunding without having to make a public offering is probably the most significant change that the JOBS Act made, of course. Any startup founder can tell you that raising money from friends and family — or, if you have the right type of product, running a crowdfund...

Just like there are many different kinds of capital round raises for businesses in all stages of growth, there are a variety of crowdfunding types. Which crowdfunding method an entrepreneur selects depends on the type of product or service they offer and their goals for growth.

The three primary types of crowdfunding are donation-based, rewards-based, and equity crowdfunding. This guide looks primarily at rewards-based and equity crowdfunding.

1. Donation-Based Crowdfunding

Broadly speaking, it’s correct to think of any crowdfunding campaign in which there is no financial return to the investors or contributors as donation-based crowdfunding.

Common donation-based crowdfunding initiatives include fundraising for disaster relief, charities...

Crowdfunding is a method of raising capital through the collective effort of friends, family, customers, and individual investors. This approach taps into the collective efforts of a large pool of individuals — primarily online via social media and crowdfunding platforms — and leverages their networks for greater reach and exposure.

Crowdfunding is a rapidly growing industry. Below, we explore key statistics including the average raise sizes, the impact marketing has on average raise, and the underlying demographics driving crowdfunding.

KEY CROWDFUNDING STATISTICS

Crowdfunding has Raised A LOT of Money

What may have seemed like a niche way to raise money at first is now a major force in fundraising. Worldwide, companies and individuals ha...

On a first foray into crowdfunding, a founder might find that things are more complicated than they thought at first. What are the best practices? What type of crowdfunding should they do? Which of the many, many sites should they go with? It becomes clear very quickly that while they might be experts in their fields, they’re certainly not crowdfunding experts.

There are plenty of perspectives out there on what to do and what not to do; plenty of crowdfunding experts who are offering their advice to new entrepreneurs. (If we’re being honest, there are probably too many.)

The same issue comes up: How do you know who to trust?

So a good plan when tackling a crowdfunding campaign is to ask the experts. From other entrepreneurs who have been t...