Social Fundraising: Crowdfunding

Starting a green business can be one of the best ways to change your world while making a living. But how do you get a business going? These days, it can be hard to get a business startup loan, even if you’ve got great ideas. In the past, people used to get business loans and donations from close family members, but these days, they usually can’t offer enough money to actually get a business off the ground.

What are your other options then? One of the best is to use your entire social network to raise funds. It’s called crowdfunding, and it’s a little like asking your family to help foot the bill for your business startup – only it’s better! With crowdfunding, you actually bring hundreds or thousands of people in on your idea and get them to help you fund your business.

You may already have heard of Facebook Causes. It’s just one type of crowdfunding that takes advantage of this idea: if everyone you know just gives a little, then you can raise a whole lot of money in next to no time! Facebook Causes hasn’t been really successful for green business startups, but there are some alternative crowdfunding options out there, too.

For instance, websites like Crowdcube and Buzzbnk specialize in helping social or eco-friendly businesses raise funds through crowdfunding. Just set up an account, and start raising money. Users on websites like these often raise $10,000 to $15,000 in just a few weeks!

The great part about leveraging the power of social fundraising through a specialized crowdfunding website is that they give you lots of options. Some are donation-based. People give you ten bucks because they believe in your business, and that’s that. Others, though, allow people to actually make an investment in your business – even a tiny one. This gives you business partners, and allows your funders to get something back out of your business’s success!

How Powerful is Social Fundraising?

Whether you use one of the crowdfunding specialized websites or not, social fundraising can be very powerful. Even if you don’t want to work through one of these sites, you can still leverage your social network online to raise more money than your immediate friends and family would be able to spare for your business startup.

Some business owners wonder if they wouldn’t be better off just contacting wealthy investors for their business startup. In some cases, this can work better, but social fundraising can also be very successful, particularly for eco-friendly businesses that everyday people want to support. Here are just a few of the reasons crowdfunding can help you raise more money for your business:

Social fundraising leverages your whole social network , including old friends, distant relations, and friends of friends. You don’t just have to rely on your limited in-person social circle to raise funds or your business, but you can use social networking to connect with hundreds or even thousands of potential donors or partners!

With social fundraising, you don’t have to worry about contacting and pitching your idea to a few wealthy investors, who may not even give you the time of day unless you’ve got some flashy statistics and a great presentation. Instead, you just present your solid business plan and honest ideas to everyday people like you, and let them decide whether or not to support you.

When you’re dealing with hundreds or thousands of people, a $10 or $20 donation or investment from each person can make a huge difference in your overall fundraising efforts, even though it’s only a little dent in the pockets of individual donors.

It’s flexible. You can ask people to donate to social or eco-friendly ventures outright, or you can get investors who want to partner with your business startup in exchange for some of the profits later on. Use the model that suits your business best!

So get your business’s Facebook profile and webpage together, and start letting people know about what it is you want to do. In most cases, you can raise a few thousand dollars right off the bat if you leverage your social network correctly and get people excited about your business venture.

Daniela Baker is a social media advocate at CreditDonkey.  She helps entrepreneurs find the right new business credit card for their startup. Remember, whether you’re looking for donations for a new non-profit in your community or finding investors to expand your green for-profit business, social fundraising holds powerful potential for you!