So How Do You Get Started As A Backer?
So It has been a while since I last wrote on this blog and I do apologise for it. We've been very busy updating and improving various aspects of our services. But we haven't been complacent with trying to come up with some interesting topics to talk about.
Since starting our services, we've had various people that we talked to say that they were really interested in Crowdfunding but didn't really know where to start. So this article will be targeted for those people and of course all those out there that are interested as well.
Firstly, a good deal of people that have backed campaigns tell us that they started because a friend or family member was running a campaign. This is by far the easiest way of getting into the fantastic world of "backing". If you're not sure how this works, basically you get invited by a friend, co-worker, or family member to support their particular campaign through a link provided in an e-mail or social media post. This link brings you to a given platform and you chose whether to back it or not.
Depending on what the campaign is, the platform you get sent to will determine they type of crowdfunding you are being invited to. So this may be a good place to talk about the different types of crowdfunding.
- Rewards Based Crowdfunding - this is the type that most people associate crowdfunding to. Basically you are asked to back or pledge the campaign based on different reward tiers. These rewards can vary from physical products to services. Just keep in mind that this is NOT Amazon! You will most likely NOT receive your goods or services for a few months after the campaign has ended as you are contributing mainly to help get the company or product off the ground.
- Donation Based Crowdfunding - these are usually cause or charity campaigns, where backers donate their contributions with no expectation of any returns. Rather this is targeted to those that are altruistic and supportive towards causes or fundraisers.
- Equity Based Crowdfunding - becoming more popular due to the returns, this form allows "investors" that would normally be excluded from contributing to a start-up or company to get a "piece" of the underlying company. Exchange for investment can be equity in the company, shares, or profit sharing depending on the platform and needs of a company. However, even though it allows lower levels of investment, backers must still qualify on some platforms.
- Lending or Debt Based Crowdfunding - In this form, the "backers" lend money to the campaign. Sometimes the lender will receive a small "interest" payment from the campaign or just the initial capital lent to them.
- Real-estate Based Crowdfunding - according to Wikipedia "Real estate crowdfunding is the online pooling of capital from investors to fund mortgages secured by real estate, such as "fix and flip" redevelopment of distressed or abandoned properties, and equity for commercial and residential projects, acquisition of pools of distressed mortgages, home buyer down payments and similar real estate related outlets."
By far the easiest to understand is Rewards Based Crowdfunding and Donation Based Crowdfunding which is what we at LaunchMii primarily focus on. But other than supporting a friend, family member or co-worker, how do you get started if you've just read about crowdfunding and want to look into it?
Firstly, you can visit some of the larger rewards or donation based platforms such as Kickstarter, IndieGoGo, Pozible, GoFundMe or StartSomeGood. Once on these platforms, you can have a look at live campaigns, which can be filtered down into categories of interest. Though this can be time consuming, the exercise will help you see the kinds of campaigns are out there and the different levels of "effort" put into running a campaign.
And that's it!
Or, is it? In the next article we'll talk about some very basic do's and don'ts when it comes to backing campaigns.
In the meantime, if you liked this article or feel that someone you know would benefit from it, please "like and share". And of course, if you want to keep receiving these articles subscribe to our newsletter.
And if you're ready to have your interests MATCHED to live campaigns for you, saving you time and headache, click here to join us now. Till then, we'll see you next time!
The LaunchMii Team Blogger!
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