Crowdfunding can be a great way to raise money for your business without having to give up equity or take on debt in many cases. You can use crowdfunding platforms to solicit funds from friends, family, and strangers who believe in your idea. In short, crowdfunding sites can help small businesses that don’t have access to big investors secure funding.
Crowdfunding can also be a way to validate your business idea, generate buzz, and build a customer base. Let’s take a closer look at crowdfunding and explore some of the top crowdfunding sites in India.
What Is Crowdfunding?
Crowdfunding is the process of raising money from a large number of people through the internet. Crowdfunding platforms allow individuals and businesses to raise money for a variety of projects, including small businesses, creative projects, and charitable causes. It’s a way to secure funds from both personal connections and strangers.
The main investor for many small businesses is the business owner, so crowdfunding can help take the burden of investing money into the venture off the owner. As Investopedia explains, “Crowdfunding has created the opportunity for entrepreneurs to raise hundreds of thousands or millions of dollars from anyone with money to invest.”
Types of Crowdfunding
Before choosing a crowdfunding platform, you’ll want to decide which style of crowdfunding makes sense for your business. Here’s a breakdown of four common types of crowdfunding.
- Donor crowdfunding is a type of crowdfunding where people donate money to help a person or organization achieve a specific goal. This type of crowdfunding comes with no strings attached, so business owners have no obligation to pay back donors in any way.
- Reward-based crowdfunding is a type of crowdfunding where people donate money in exchange for rewards. For example, donors might receive a complimentary product, early access to products and promotions, or some other token of appreciation.
- Debt crowdfunding is a type of crowdfunding where people lend money to businesses in exchange for interest payments. This type of crowdfunding is popular among businesses that need capital but don’t want to give up equity or take out traditional loans.
- Equity crowdfunding is a type of crowdfunding where people invest money in businesses in exchange for equity in the company. However, equity crowdfunding isn’t allowed in India, according to Impact Guru.
Top Crowdfunding Sites in India
There are a number of crowdfunding platforms in India, but some of the most popular ones include Indiegogo, Impact Guru, and Ketto. Let’s take a look at each of them.
- Indiegogo is one of the most popular crowdfunding platforms in the world. It’s been used to raise money for everything from new businesses to medical treatments to charitable causes. Indiegogo is particularly popular with Indian entrepreneurs because it doesn’t require you to have an established business. You can launch a campaign on Indiegogo even if you’re still a fledgling venture.
- Impact Guru is one of the top crowdfunding platforms in India. It’s simple to use and allows you to raise money for your business quickly and easily. You can create a campaign on Impact Guru in just a few minutes, and you can start accepting donations right away. Additionally, Impact Guru allows you to offer rewards to incentivize donors and thank them for their financial support.
- Ketto is another popular option for business owners who want to tap into crowdfunding to raise funds. It’s one of the oldest and most well-known crowdfunding platforms in India, and it has helped raise money for a variety of projects. In addition to supporting entrepreneurial projects, Ketto supports medical crowdfunding, education crowdfunding, and fundraising for other causes.
The Bottom Line
Small business owners should consider tapping into crowdfunding to raise money for their businesses. That’s because it can be a great way to get a business off the ground or expand an established business. Since there are multiple types of crowdfunding and several sites to consider, you’ll want to thoroughly research your options to find the right fit for your business.
For instance, it’s important to consider the fees and rules for each platform. Some platforms charge fees per donation, while others charge fees for hosting campaigns. You’ll also want to research how much the average campaign raises. According to Fundera, “Indiegogo projects have raised an average of $41,634 each — the highest average amount of any platform.”
However, there are several other platforms to consider alongside Indiegogo, including Impact Guru and Ketto. These crowdfunding sites have helped democratize fundraising and investing. Now, a small business owner without connections to venture capitalists can raise funds to support their endeavor. Crowdfunding can help you take your business to the next level.