Four proven options online that can get you as much as $10 million in funding (that’s the record so far).
By Anna Vital (Co-Founder, Vash; Founder, Funders & Founders)
For all the hype that crowdfunding has caused, there are very few startups that have been crowfunded. Yet. The future is looking very good for crowdfunders.
You have four proven options that can get you as much as $10 million in funding – or at least that’s the record so far.
Option #1 – AngelList
AngelList is a way to connect with investors. But the new Beta sub-product of AngelList, AngelList Invest actually facilitates the transaction between you and multiple investors without you ever meeting them.
There are caveats, of course. One is, you need to open up at least $150K of equity. That’s the easy part for most. Two, the round must be led by a top-tier investor. Not bad. On the investors side, they, of course, have to be accredited. They need to invest at least $1,000. That’s easy.
Seems like a great option, but how are you going to deal with say a hundred different investors all for the sake of raising $150K? That’s covered, too.
AngeliList used Second Market, a company that trades in pre-IPO shares, to set up a fund. You never have to deal with investors directly. Sounds promising, but it is still in Beta. The best news about this is that the service is free, so far.
Option #2 – Kickstarter
The good news is Kickstarter is a high-traffic site. You will get a lot of exposure. The bad news is it does not allow most software and hardware products. Really, it’s built for creative projects. And specifically those that have an end point. There are a few apps that are on Kickstarter, though, so don’t write it off quite yet. Kickstarter is not free. You pay 3% for the service, plus the credit card processing fees.
Option #3 – IndieGoGo
The best thing about IndieGoGo is the flexible funding. If you don’t raise your goal all the way, you still get however much you did raise. The site is not as high-traffic as Kickstarter, according to Alexa.com, but it has been used successfully with the highest amount raised being $1.3 million.
Option #4 – Last, but not least – you can just do it yourself.
Build a Kickstarter-like interface on your custom domain, bring traffic to it, and pre-sell your product. That is a major success story from a startup called Lockitron that was originally turned down by Kickstarter. Lockitron raise $2.3 million in a matter of weeks on its own site. They now made the template available for anyone to use (selfstarter.us) – with over 1,000 stars on GitHub, it has become quite popular.
This post was originally posted at Funders & Founders
Women 2.0 readers: How are you funding your startup? Let us know in the comments!
About the guest blogger: Anna Vital is a co-founder of Vash.co and founder of Funders and Founders, a San Francisco-based startup promoting startupization. She has been an entrepreneur since age 14 when she opened her fist business, a test-prep school. After attending Brigham Young in Utah, she attended law school in Nanjing, China. She speaks Mandarin Chinese, English and Russian. In her ideal world, everyone from moms to engineers to executives will do startups. Follow her on Twitter at @vitalhack.