Have you considered asking the community to support your new enterprise?
Target audience: Social enterprises, nonprofits, volunteer groups, sustainable businesses, community organizations.
Guest post by Kerry Given
Green Marketing TV
Finding funding can be one of the biggest challenges for social entrepreneurs. Fortunately, there is a growing number of options for social entrepreneurs and founders looking for capital to start or expand their social enterprise, startup or nonprofit organization and do more good in the world.
One non-traditional funding opportunity that has seen exponential growth in recent years is the phenomenon of “crowdfunding.” Family and friends have been one of the most common sources of venture funding capital for centuries. Crowdfunding takes this age-old source of venture funding and brings it into the digital age.
Thanks to social media and other forms of modern technology, entrepreneurs are able to build networks of friends, colleagues and like-minded individuals more easily and effectively than ever before. Crowdfunding websites allow entrepreneurs or project leaders to leverage these networks to gain funding.
Typically, entrepreneurs post a request for funding on a crowdfunding site with a detailed project description. Depending on the site, funding may be provided as a loan or a donation. Once the funding request is posted, the entrepreneurs use their networks to spread the word about their project to potential donors through word of mouth, email, Facebook, Twitter and other social media platforms.
Crowdfunding is not for everyone. The majority of crowdfunding sites fund entrepreneurs on an all-or-nothing basis. If the project is fully funded when the deadline arrives, the money is given to the entrepreneur. If it is not fully funded, it is returned to the donors to keep or donate to another project. So it’s important to have a compelling project or story and to be a skillful marketer and networker to ensure that word about your project reaches enough potential donors to fully fund the project before the deadline. If you’re confident that your social enterprise has what it takes to become a crowdfunding success story, you may find crowdfunding to be the perfect option for your fundraising efforts.
The following is a list of crowdfunding websites that can help your social enterprise, sustainable business or nonprofit organization get off the ground:
33 Needs: Connecting microinvestors & social enterpreneurs
133needs is a recent crowdfunding startup that connects microinvestors with social entrepreneurs who have big ideas in categories such as sustainable food, health, education and the environment. Investors can earn a percentage of revenue in exchange for their support.
AppBackr: Offset app development costs
2A specialty crowdfunding site that may be useful to some social enterprises, AppBackr allows Apple developers to get funding upfront for iPhone, iPod and iPad apps in the concept stage by selling the app wholesale to backers, who receive a percentage of the profits for the apps they have purchased. Many app buyers also assist developers with marketing and promoting their apps to ensure that their investment is fully recouped. With a growing number of social enterprises tapping into the explosive apps market to raise awareness and sell products or services, AppBackr may be a useful tool to help offset app development costs, and even gain some extra promotional help.
Buzzbnk: Supporting a wide range of fields
3Buzzbnk is a crowdfunding platform especially for social enterprises that allow funders to donate either money or time to support social enterprises working in a wide variety of fields. Though based in the UK, it is open to social ventures operating anywhere in the world. Social enterprises must submit their project proposal to Buzzbnk and the Buzzbnk team will work with the social enterprise to help develop appropriate fundraising targets and benefits or rewards to offer funders.
CauseVox: Fundraising pages for nonprofits
4CauseVox offers nonprofit organizations a fully customizable fundraising page that makes collecting money from supporters easy. Supporters can also create their own personalized fundraising pages. Social media integration makes it easy to embed YouTube videos, Flickr slideshows and more.
ProFounder: Investors share in the profits
5ProFounder caters to entrepreneurs – social or otherwise – who are looking for alternative sources of venture capital. ProFounder provides a secure platform where entrepreneurs can raise money from family members, friends and other connections, who then receive a share of the profits when the business they have invested in succeeds. This revenue sharing system is good for investors and good for entrepreneurs, because it doesn’t commit entrepreneurs to making debt payments (potentially with high interest rates) during periods of bad business, only when the business is successful and profitable. Continue reading