At BrandWerks, we work with many startup businesses. We are a full-service brand development company, so helping our clients plan and raise funds for their businesses is something extra that we do.
A simple and effective fundraising opportunity is crowdfunding through websites like Kickstarter or Indiegogo. The idea is to pitch your idea, share your campaign and offer those who contribute (e.g., colleagues, family, friends and perfect strangers) rewards for their support. Rewards can vary from a simple thank you note to products at retail value or more.
Crowdfunding sites typically take a cut ranging from 4 to 9% of your campaign goal, about the same as a private placement finder fee. For best results, set a realistic funding goal based on initial startup costs (brand and packaging creation, inventory, sales materials, product demos, etc.). Keep in mind some websites require you to meet your entire goal for funds to be dispersed to you. Remember, you will be competing with many other entrepreneurs, so be creative when designing your campaign. Also, make sure you have several different award levels with high perceived value. Depending on the amount of money you aim to raise, running a campaign can require significant time and networking…but definitely worthwhile!
See a real, live example from one of our clients, B. Buttons & Co., a startup maker of very unique natural soaps.