nyc business solutions + kiva zip: crowdfunding 101 guide for small biz
TRANSCRIPT
So you want to crowdfund your startup?
1. Crowdfunding in Plain English is...Lots of individuals, each contributing small amounts ... that add up to fund a creative project, a business or a cause... facilitated by low-cost online, digital platforms... Platforms can either be for-profit (charging either fees or interest) or non-profit (free).
The 4 most common models of startup crowdfunding for US small businesses are:-1) Pay-with-Reward (e.g. Kickstarter)2) Charity/Donation (e.g. Causes)3) Crowdlending / Crowdfunded loans (e.g. Kiva Zip), 4) Investment (e.g. Prosper.com)
What every small business needs to know about the complex wold of crowdfunding. Information provided by Kiva Zip for clients of NYC Business Solutions. zip.kiva.org
2. How to choose whatʼs right for me?Selecting the right “crowd” to suit your businessDifferent sites suit different kinds of businesses. Most sites cater to creative, entertainment or tech startups because these inspire their donors (their ʻcrowdʼ). Others - say, agriculture or cleaning services - can still definitely benefit from crowd-funding but only via select sites (see below).
Compare different costs, success rates, speed of fundingDo factor in all costs - commission/fees, rewards and postage, videos, credit card fees. Also, the larger the site volume, the faster and more likely a project gets funded on average.
3. How not to fund and not fail? 71.3% of all campaigns fail to reach their crowdfunding goalA creative reward and a well-crafted, well-told story dramatically increase your funding campaignʼs chances at success.
Web resources on reward and story-telling best-practicesFree articles and tips on how creatively and effectively fundraise without wasting precious time and money are available on slideshare.net (search for crowdfunding tips), rockethub success school (www.rockethub.com/education), and on twitter.com (search for #crowdfunding).
4. Whoʼs right for crowdfunded loansNot all businesses are suited to the reward and/or donation-based crowdfunding sites.Kickstarter and Indiegogo - the 2 biggest sites - work well for startups that can reward donors with desirable gifts or exclusive experiences. They work less well for ʻeveryday main streetʼ small businesses who cannot offer exclusive rewards.
Your best option is an interest-free crowdfunded loan if...You’re an everyday small business or startup with a clear business plan....AND you could use a 0% interest zero fee small loan <$5000 to help your business start/ grow more profitably....
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The top crowdfunding sites for small business: A side-by-side comparison
Find out more:
NYC Business Solutions Brooklyn: Manuel Dominguez [email protected]: Courtney Williams [email protected]
Kiva ZipNew York: [email protected]: [email protected]
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Small business loans funded directly by ordinary peopleʼs generosity. No one makes money but you.Non-profit crowdlending to small businessSmall loans to entrepreneurs and startups <$5000All loans are 0% interestZero fee to Kiva or PayPal - no one takes a cutNo penalty charges for goal not met, also 99.5% of loans posted on Kiva Zip will be fully funded
No type-of-business restrictionsStartups <6 months and pre-startups also qualifyAny kind of small business/enterprise qualifies: farms, cleaners, handmade crafts, home contractors, cleaning services, landscapers
No minimum credit scoreStrictly character-based lending programInstead of a credit score, Kiva Zip requires a public and written endorsement of a loan applicantʼs trustworthiness - their personal character and their business competence