On April 5, 2012, President Barack Obama signed the Jumpstart Our Business Startups, or JOBS Act, which enables anyone to raise capital through crowdfunding.
Crowdfunding is asking a crowd of people to donate a defined amount of money for a specific cause, project in exchange for various rewards. It's a great way to raise money for your project or business!
Crowdfunding platform comparison: https://www.crowdfunding.com/
Crowdfunding info from Investopedia: https://www.investopedia.com/terms/c/crowdfunding.asp
More info from https://www.thebalancesmb.com/a-guide-what-is-crowdfunding-985100
Here’s a list of some of the most popular crowdfunding sites to get you started:
Kickstarter is a projects-only crowdfunding platform. It’s an amazing resource for entrepreneurs, business owners, artists, authors, fashionistas, and the like. You cannot use this particular crowdfunding resource to start-up your business (per say), but you can use it to pay for materials and such to help make the start-up easier.
Kickstarter is incredibly popular, so you are capable of raising a lot of money here – but make sure you are EXTRA careful about setting your goals. If you don’t reach your target, all contributions are refunded to the donors. Creativity is definitely wanted on Kickstarter, so be sure to use your right brain for this one!
Indiegogo is a powerful crowdfunding platform for any kind of initiative (including starting a small business), and unlike Kickstarter, there’s an option to keep your funds without fully reaching your goal; of course, the folks at Indiegogo will charge a 9% fee rather than 4% on your contributions if you don’t reach 100% of your contributions.
No matter what your cause is, you are free to make a campaign – and a lot of campaigns on Indiegogo reach their goals. You get global exposure, and like Kickstarter, you’re able to incentivize contributions with “perks” for whatever amount they choose to give.
GoFundMe is a crowdfunding platform that allows people to raise money for events ranging from life events such as celebrations and graduations to challenging circumstances like accidents and illnesses. It's also been used for creative projects.
For lack of a better term, Microventures can be described as a professional crowdfunding platform. Microventures allows you to submit a business plan and attract angel investors. It requires an initial monetary investment of $100 from you, then investors decide if your business is something that is worthy of investment.
This is the type of investing that can get you really far – when you start talking about investors, you’re not talking about thousands of dollars, you get into raising millions of dollars for your business. Microventures isn’t for the artist seeking a down payment for a gallery, or the musician looking to record an album – this is for a business or idea that can provide a return on investment. If you’re looking for large amounts of capital, this is the place to go.