Sunday, 5 August 2012

Crowdfunding - one way to Fund your Venture

Hi Everyone,

Need funds to outfit your new coffee shop? Want to finance your music career beyond singing in the shower? Have a movie to finance but didn't get a grant? Want to support a philantropic cause?

Now there is crowdfunding.   Crowdfunding lets you source contributions from the public for your project. In return, you offer rewards to  your contributors rather than equity or profit share. You might give them products once your venture is up and running. For example, 20 coffees for a $50 contribution, a DVD for a $30 contribution, or tickets to the launch.

Crowdfunding can be thought of as an offshoot of crowdsourcing. Both had their start several years ago but are becoming more mainstream now. With more people becoming Internet-literate, there is greater confidence in sourcing ideas and funds via the Net from strangers.

Here is a good article that explains crowdfunding and its pros and cons.

And an interesting real life story of crowdfunding.

There are websites to help you collect your pledges, such as this small Australian company based in Melbourne and Sydney called Pozible (nice name for your dream venture!). They take a small cut of the funds.

Crowdfunding is still in its infancy in the legal framework. As with anything involving commerce, it is always wise to remember caveat venditor (Let the Seller Beware) and caveat emptor (Let the Buyer Beware).  So do your homework before plunging in.



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