Entrepreneur Magazine writer, Kate Lister, recently published an article titled “From Friending to Funding.” The article discusses how entrepreneurs seeking funds are raising money to fund ideas business startup, creative projects, and even cause-related ventures with no requirement to pay the money back.
The article references several entrepreneurs that received money to fund projects that ranged from a live-action short film, a photography project, to opening a coffee house and bookstore. What is this type of money giving activity called? Crowd Funding – this is the practice of combining social networking and entrepreneurial fundraising. Unlike peer-to-peer funding, where there is an expectation of profit gain and payback, the money does not have to be paid back. All monies received are donations from friends and strangers, who believe in the seeker’s vision; no strings attached.
How does it work?
IndieGoGo, as stated on the website, it is “A Collaborative way to fund ideas.” Fund seekers are able to set their goals and create campaigns for cause-related, creative, or entrepreneurial projects. Throughout the life of the campaign, fund seekers receive donations, and whether or not the goal is achieved, the fund seeker gets to keep the money received minus IndieGoGo fees. Projects are not limited to an expiration date and funding is ongoing until goals are reached.
According to the website, IndieGoGo was founded in 2008 to “democratize fundraising” “because there are so many passionate people in this world, with great ideas and big dreams, who are just looking for the opportunity to get funding.” People from anywhere in the world can join free and start raising money. Benefits include exclusive access to the IndieGoGo community and their partners, including MTV New Media.