Crowdfunding is simply asking for funds to start a business with everyday ordinary people. There are many popular platforms to go with from Kickstarter to Indigo to GoFundMe. Successful crowdfunding campaigns tend to have one thing in common in that you must give rewards or incentives to really get the money you need. People do like funding new and fun projects but nothing quite gets them going as a reward. Let’s start with the platforms and their differences.
Kickstarter is by far the most popular. They go the route of all or nothing funding. If you reach your full funding you get the money but if not you don’t. They allow you to offer various rewards but do not allow equity. The fees are a flat 5% of the amount earned plus 3% to 5% for processing fees. Here is a link to their current fees. Many big projects have started here from products to business expansions.
Indiegogo is pretty close to on par with Kickstarter. It does seem to favor products more than anything else but would work for funding a business startup or expansion. The biggest benefit Indiegogo promotes is they say they provide support from A to Z of your project. A perk or reward system is also available here. The fees are on par with Kickstarter at a 5% platform fee and 3% plus 30 cents credit card fees. Here are their fees . The second biggest benefit is that Indiegogo doesn’t require 100% of funding to get the money you’ve raised.
GoFundMe is typically geared toward charity but can work for funding a business project. As the first two, GoFundMe has helped fund many projects successfully. They also allow a reward system. The fee structure is 5% for the platform and 2.9% plus 30 cents for processing. Here is a link to their fees. You do not have to reach your goal for this platform to receive funding.
There really are only slight variations in the platforms above for brewery funding. Not everyone will get you money unless at 100% funded but ideally you’ll need that full funding to get going anyway. Your rewards can be limited as you might have to stay away from directly giving free beer as laws and rules can vary from place to place. It’s still pretty cool to let people influence a batch of beer or get swag for a new brewery though. I’m a fan of the name on something in brewery rewards and the help brew a batch reward. Rewards will get you the funding but don’t promise something you can’t deliver. Remember people might not always remember a good experience but a bad one will be ingrained in their head forever.
I plan to use one of the crowdfunding platforms to get my seed money once I get my plans together. It’s not really feasible to get 100% of your funding from crowdfunding but it’s a good way to get your licensing and seed fund going. Licensing takes a long time to get going so you’ll have quite some time to get the rest of your funding raised. Now go prove me wrong and fund your brewery 100% crowdfunded!
Had a successful campaign on one these platforms or others? Feel free to post a comment or shoot me an email.