LETHBRIDGE – It’s a newer wave of fundraising taking over the internet. Dozens of websites are available to help individuals or groups raise money for everything from new technology idea to funeral costs. It’s called crowd sourcing or crowd funding and it’s the newest way for start up businesses to get funds. The question is, what campaigns have the most success?
“I had kind of an idea of like crowd funding,” said Jena Murray. “But, I really didn’t know the extent of how demanding it was and how much prep work actually had to go into the whole process.”
Murray just completed a crowd funding project on Indiegogo to raise $15,000 for her clothing line ‘VEENA’.
Although online fundraising may be a new venture for people, the principles of crowd sourcing have roots in more traditional methods.
“Certainly with the advent of the internet it’s becoming so much more popular even associated solely with the internet,” said Rod Leland, Online Marketing Specialist and Digital Projects Lead at Lethbridge College. “But, by no means is it a new thing. It’s been around for a very long time.”
Several crowd-funding campaigns offer rewards for donors, depending on the amount you donate. Murray says that’s just one advantage to taking the fundraising effort online.
“Indiegogo is really good – like everything is really organized on there. People give you all their information, their shipping information, and you know each order is organized,” said Murray.
Rewards offered by Murray included different clothing items and scrapbooks from her girls clothing line.
Online specialists say soliciting funds from large investors can be difficult for start up businesses. Crowd funding can help get rid of some of those barriers.
“Crowd funding can allow many businesses to skip over venture capital firms, or looking for a single or set of large investors and solicit small donations from family, from friends, from interested members to future customers,” said Leland.
However, he says on some crowd funding platforms only about 40 per cent of projects are successful – leaving the fate of the money up in the air.
“It’s very important for potential donors or funders to understand the terms of a specific project,” said Leland. “To know if their funds will be returned to them if the project is successful or not, and where those funds are going.”
Even though Murray’s campaign is over, she says she has lots of work to do.
“Now I start fulfilling perks and shipping things out to people,” said Murray. Some of the perk will be sent across Canada, The United States and even to France.