What is Crowdfunding and How Can It Help?

By Brandi Calhoun

Doing your own thing can be a costly venture, whether it’s creating your own product or starting your own company. Not everyone has investors that can financially back every idea they have (and not every idea is a winner worth investing in, unfortunately.) Not everyone is comfortable taking out a giant business loan and starting off in tremendous debt.

That’s where crowd-funding platforms like Kickstarter and Indiegogo come in. Crowdfunding is the practice of funding a project or venture by raising several small amounts of money from a large number of people, typically on the Internet. It has revolutionized the way startups fund their projects.

Crowdfunding can help entrepreneurs start their own business or build their own product without the looming worry of debt and bankruptcy. It can also help an entrepreneur gauge how great their idea really is by how much support they are receiving, even before putting out the product.

San Francisco entrepreneur-advisor matchmaking service Clarity teamed up with Column Five Media to build the infographic below that summarizes what crowdfunding is, how quickly the industry has grown and some quick facts about the next generation.

Two Snackbox clients, the biem Butter Sprayer and The Spyder 360, both ran wildly successful Kickstarter campaigns, which have allowed them to produce and eventually distribute their product.

In our next blog, we’ll tell you about the aforementioned platforms and compare the two, complete with pros and cons as well as how-tos.