Overview on Crowdfunding

SBA logoIf you’ve always been curious about crowdfunding, or, if you don’t know what crowdfunding is, the SBA has an instructional slide show on their site that gives a quick overview of this new method that entrepreneurs use to start their businesses.

As a quick primer (before you watch the multimedia slide show), crowdfunding is generally accomplished via the internet, and is employed to fund a wide spectrum of activities like the financing of a movie, product development of an invention, political activities, NGO efforts, open source software, and of course, formation of new companies. People (the crowd) that are interested in the promised outcome donate money towards the goal. But, they do expect something in return.

So, if it’s a movie, maybe they get front-row seats at the premiere, and a DVD copy of the finished movie. If it’s a bakery that specializes in cakes, maybe the company owner promises a custom cake to donors anytime within the first year of business. If it’s an NGO that’s trying to bring clean water to parts of Africa, then maybe it’s a mention on the website and the satisfaction of doing some good in the world. What the donors get varies, according to the goal of the effort, and what the person or organization proposing the effort thinks will be appealing to donors.

If you’re not familiar with the concept, crowdfunding probably seems a bit far-fetched concerning a business start-up. After all, why would people give you money to start a business that’s supposed to make money? Shouldn’t people that start a business do it with their own money or get a loan from somewhere?

Well, you would be surprised at how many start-ups have successfully gotten the seed money to start a business this way. There are thousands of success stories, and over 470 crowdfunding platforms, large and small, in existence today.

Many people want to be part of a business they find intriguing, many people want the promised payoff, and many people want both of those things.

But, enough of this primer – here’s the slide show on the SBA site. They do require some basic information from you before you can watch it for free, but it’s nothing onerous, and it’s a short form, and you can leave parts blank if you don’t want to answer the demographic questions.

 And, of course, they market the SBA during the slide show. But it’s still informative and useful, even if it moves s-l-o-w-l-y. You even get a certificate. Here you go: SBA Crowdfunding Presentation

Perhaps it will give you some ideas of your own.

6 thoughts on “Overview on Crowdfunding

  1. Humberto wrote:

    Everything depends on how good a video you can make if you want money this way. The video is the most important thing. Nothing else is close.

  2. Larry Geiss wrote:

    Agreed! The appeal of the video describing your goal, and the appeal of you and your goal via the video is everything. If you don’t do a good video for your crowdfunding effort, then you are getting zip.

  3. Boobug wrote:

    There are a lot of resources online for crowdfunding if you want to try it. People often are disappointed in the results because they expect everyone to just embrace their idea without much effort in the presentation.

  4. Yvette wrote:

    My business partner and I tried this last year and failed so miserably. Not even 10% of our goal. We know what we did wrong, though. And one of the things we did wrong was the low-rent video.

  5. Pablo Los Verdes wrote:

    Not really an option for a lot of people cuz they just don’t have the technology skills to even know where to start

  6. Seeker wrote:

    Everyone loves what you guys do. This sort of clever work and reporting is great! Keep up the terrific works, guys

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