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Other sites like Profounder, which is currently in private Beta, aims to make crowdfunding easy for ordinary business owners. They'll assist in creating legal documents that will make the investments official and the terms easy to understand by all. Profounder will also enable users to hold both private and public rounds of investments, collect those investments, keep track of filings, deadlines and bookkeeping, and distribute repayments to investors automatically.

Sponsume is a new online platform to help individuals and organisations promote and crowd source the funding of their projects.

At Sponsume’s heart is the ability to let entrepreneurs, artists, charities, inventors, or just about anybody, raise funds for their idea through the sale of project vouchers, which can – should the project go ahead – be redeemed for various rewards. These can be almost anything, except equity and intellectual property rights, with the contract existing between the user and project owner, not Sponsume itself

Right now Sponsume is free for project owners to use but at a later stage the company plans on charging commission of around five percent of the total raised. Other revenue streams include interest earned on accounts, sponsored placements and partnering with video production companies.

Every year the World Economic Forum picks a number of up-and-coming technology startups from around the world and dubs them Technology Pioneers.

This year’s group includes CloudFlare, DoubleVerify, Dropbox, Kickstarter, Lending Club, and Palantir Technologies.

Crowd-funding website Kickstarter allows anyone with an idea for a film, album, art project, or product to make their pitch, say how much they need to get started, and ask for pledges. Once the minimum amount needed is pledged, the project gets started. To date, Kickstarter has helped fund more than 25,000 projects, with $75 million pledged.

Described as a fan-funded record label, My Major Company has launched in the UK with a mix of traditional A&R and crowdfunding.

It differs slightly from similar sites, such as Sellaband or the UK’s Slicethepie, in that the acts featured on the site are sourced by the startup’s own talent spotting department first. In addition, fans who choose to invest are essentially buying shares in any future profits made from the artist’s launch campaign as a whole (physical and digital music sales,

The model has been imported from France where My Major Company has been running since 2008,

Be realistic, and make sure you’re setting the goal at something achievable — if you can’t hit that total, you’ll be walking away with nothing but squandered good will.

Moreover, the collaboration enabled by peer-to-peer social lending and funding platforms represents a unique opportunity presented by The New Sharing Economy.

Crowdfunding will continue to evolve. Services such as Sprowd aim to make it a credible way to fund startups. Congressional Bill HR2930 could make it easier for businesses to raise equity from investors through campaigns.

ON NOVEMBER 3rd, surprisingly, a bill was passed by the House of Representatives with strong bipartisan support. The Entrepreneur Access to Capital Act aims to make it easier for small businesses to raise money through “crowdfunding”. For the first time ordinary investors would be allowed to put up to $10,000 in small businesses that are not registered with the Securities and Exchange Commission, enabling Joe Schmo to win big if the company becomes the next Google.

Start-ups are especially needy now, since many banks are loth to lend even to well-established companies.

Jack Herstein, president of the North American Securities Administrators Association, says the only jobs created will be “more jobs for securities investigators”. The current bill does not require start-ups to give detailed information about their business plan, and since stakes in businesses are illiquid, investors will not be able easily to get their cash back.

Kickstarter emphasizes project-based funding campaigns, and the projects they accept generally need to have a definite end-date and clear metrics for completion and success. For businesses just starting out (like ours), the lack of an “end” to your vision may preclude you from qualifying. But where Kickstarter focuses on funding projects to completion, IndieGoGo promotes the broad funding of ideas, from for-profit businesses to not-for-profit causes to creative endeavors.

We went with IndieGoGo—we didn’t meet Kickstarter’s project-oriented criteria—and we were charged 9% on the contributions we received (a fee that gets kicked down to 4% if the campaign reaches its funding goal).

make sure someone on your team can have a strong, dedicated focus on the campaign—it won’t take off without it.

A majority of our contributions came from people we know. Our enthusiastic team of Tweeters, Facebookers, and staff who supported the campaign and alerted their friends and followers brought us a strong a first-tier network of funders.

The IndieGoGo staff selects campaigns they believe exhibit a high “GoFactor” to highlight on the first page of results

There are loads of articles on the web with ideas for perks from successful campaigns, but keep in mind that those benefits should be thoughtfully tied to your core project.

1.  More than 50% of companies funded by angel investors fail, with most returning nothing to investors.  And, less that 10% of these angel-funded companies are home runs, providing exciting returns on investment to angels.  These home runs often take a decade or more to mature to the point that investors can exit.  Since investing in startup companies is very risky, the only winning investor strategy is to pick well and invest in many companies.

downsides to crowd funding.

Crowd investors will not be in a position to demand board representation on new companies and will likely suffer from lack of feedback from funded companies.

Crowdfunding is a natural fit for an independent game developer who needs to connect with an audience and secure funding at the same time; rather than having to "prove" your game to a publisher, you're "proving" it directly to your customers, and you don't have to go out on a limb funding it yourself with no idea of whether or not you'll sell enough copies to recoup your investment.

Crowdsourcing has moved to the money arena, tapping the power of larger audiences to provide funding options for startups and established businesses. A host of websites dedicated to crowdfunding are popping up, matching small businesses, soloists and artists with people willing to invest in projects they find worthy of support.

Plus, if Launcht had been legal and available in 2007, it would have allowed us to take smaller amounts from a larger group of investors. This would have reduced the pressure on us to produce big returns for each investor, because each investor would have had less at risk. It also would have given us access to more people who would have been vested in our success, which would have produced more leads and opened more doors.

Plus, if Launcht had been legal and available in 2007, it would have allowed us to take smaller amounts from a larger group of investors. This would have reduced the pressure on us to produce big returns for each investor, because each investor would have had less at risk. It also would have given us access to more people who would have been vested in our success, which would have produced more leads and opened more doors.

To catch the eye of potential funders, you’re going to need to stand out, engage your community and close the sale.

Are you a creative? Be sure to check out Kickstarter or IndieGoGo.Looking to start more of a traditional, albeit entrepreneurial, business? Head over to ProFounder.Does your idea have a social bent? You might do well at Buzzbnk or 33needs.Non-profits can fundraise at sites like CauseVox or FirstGiving.

Many of the successful projects on crowdfunding sites target a specific, narrow audience.

collaborative thinking can provide solutions faster

by involving people in the early stages, they will feel more connected to the project

1. Crowdrise

Republicans and Democrats may finally agree on something: Small business owners and entrepreneurs need better and more plentiful opportunities to gain access to capital, grow their businesses, and create more jobs.

Last month, the House voted 407 to 17 to pass passed the Entrepreneur Access to Capital Act, which seeks to makes it easier for small businesses and entrepreneurs to raise capital through crowdfunding.

"This bill will make it easier for entrepreneurs to raise capital and create jobs," the White House noted in a statement.

An interesting new development on this type of funding is its expansion in the area of crowdfunding entrepreneurial businesses.

Two UK companies are however pioneering the provision of finance through lending and equity investing from the crowd. Fundingcircle, founded in 2010 allows the general public to directly lend to businesses seeking finance, allowing them to quickly access capital without having to go through the banking system. So far several thousand lenders have provided loans worth some £24 million. Crowdcube, also launched in 2010, allows individuals to take an equity stake in a company raising finance.

Crowdfunding supporters argue that while raising money is the most important benefit the platform provides, another important advantage of this new source of finance is the power of "collective intelligence" i.e. the ability to mobilise the wisdom of crowd by asking investors to actively participate in new product development (e.g. by voting on their preferred product or services) and actively contribute to the due diligence of the opportunity by sharing their expertise.

Crowdfunding is a hot topic of late, in part because the JOBS Act promises to bring significant changes to the way it works.

or starters, small businesses that want to move forward with crowdfunding can begin to gather all the important documents needed to launch a campaign. Documents will include the financial status of the company, financial statements certified by an officer or accountant (depending on the amount of the offering), the company’s tax return for the most recent year, a business plan, and a capital structure explaining who owns what percentage of the company.

typically the amounts that you’ll be looking at will not represent a big ownership stake

MicroVentures

Also described as peer-to-peer lending, MicroVentures works with investors as well as with those who need money to get a certain project off the ground.

companies pay $100 to MicroVentures and then send their business plan to the site for approval.

Kickstarter

The site has seen more than 13,000 successful campaigns since its launch in 2009.

Artists, designers, and inventors

Perhaps the most striking feature of "crowdfunding" is the broad geographic dispersion of investors in small, early-stage projects. This contrasts with existing theories that predict entrepreneurs and investors will be co-located due to distance-sensitive costs. We examine a crowdfunding setting that connects artist-entrepreneurs with investors over the internet for financing musical projects. The average distance between artists and investors is about 3,000 miles, suggesting a reduced role for spatial proximity. Still, distance does play a role. Within a single round of financing, local investors invest relatively early, and they appear less responsive to decisions by other investors. We show this geography effect is driven by investors who likely have a personal connection with the artist-entrepreneur ("family and friends"). Although the online platform seems to eliminate most distance-related economic frictions such as monitoring progress, providing input, and gathering information, it does not eliminate social-related frictions.