- December 12, 2021
- Posted by: Robert Brown
- Category: Investing
One of the keys to an effective crowdfunding setup is to choose your funding site carefully, unless of course you take the other option of building your own crowdfunding website.
Keeping in mind the fact that each of the major funding websites each have their own set of rules and fee structures (you can avoid all fee costs if you setup your own WordPress website using a special crowdfunding plugin), there are five basic steps to setting up your project.
5 Steps to Setting up Your Campaign
1. The first step in setting up your project is to include detailed information about yourself,what your project is all about and how much capital you will need to complete your project. Another tip is that it is a great idea to include detailed information about what you will be using the money for.
2. You will have to set a time limit for your project. This limit can be anything from 1 up to 90 days. Keeping in mind that the longer your project will run then the more money you are likely to receive.
3. It is always good practice to start to promote your crowdfunding project in advance in order to obtain as many backers as possible.
4. As the backers donate the funds, your money will be placed into an escrow account until the end of your project date.
5. As soon as your project has reached its target date, the funds will be released to you. The exception to this is that (with some crowdfunding sites), if you do not reach your target then you will not receive any funds. This is why is it always advisable to look at all the options, including obtaining your own crowdsourcing software plugin.
The Best Crowdfunding Sites
There are many different funding sites available, the best way to find the latest and most popular ones is to do a search for ‘the top ten crowdfunding sites’ this way you will find the most current sites available.
Main Points to Consider
As you have read above, there are many different points to consider when choosing the right funding site, I will elaborate a little further:
1. One of the main points to consider is the charges that the website will take from your project once it is completed. This can vary from site to site but a rule of thumb is that you will lose between 5-8% in fees. It is always a good idea to take this into account before setting up your initial campaign.
2. Another main point to consider is if the crowdfunding website will in fact not give you any of the funds should you not reach your target. One idea here, is to go with the site that will have slightly higher fees but will actually give you all the funds you raised even if you do not reach your target (my preference).
3. The payment options are always good to consider, certainly a bonus if the website will take PayPal payments and even better if they will pay your funds to you in PayPal also.
4. My favourite option of course is to look for some software that you can easily setup your own crowdfunding website with a few clicks of the mouse. This type of system will not take any fees, you pocket the lot!
I hope that A Crowdfunding Guide has been of help to you.