ILMA Compoundings – January 2019 - 27

HOW DOES CROWDFUNDING
WORK?
A crowdfunding venture is set up
through an online platform; there are
well over 100 U.S.-based platforms to
choose from. Some of the most popular include Kickstarter, GoFundMe
and Indiegogo, for example. These
platforms allow the user to create a
description of his or her venture and

set a monetary goal to be reached.
From there, "investors" make donations online through the platform.
There are two main types of
crowdfunding: donation- or rewardbased crowdfunding and equity
crowdfunding. Reward-based crowdfunding involves the donor receiving
a product or service related to the
specific venture, and there are usually
"levels" of reward that correspond with
the amount donated. For example,
a contributor who gives $50 might
receive a discounted rate on the
manufacturer's new product created
by the very project the crowdfunding
is helping to build, while a contributor who gives $500 or more might
receive six months of free access to the
product - depending on the value of
the product, of course.
Equity crowdfunding means that
each donor gets a stake in the company. This type of crowdfunding is
often used in the startup world or for
smaller businesses looking to grow
or expand. In equity crowdfunding,
donors make the choice to invest in
a venture they believe has potential,
with the hope that they'll receive a
positive return on investment when
the venture succeeds.
GETTING STARTED
Manufacturers that are considering
launching a crowdfunding campaign
should decide whether reward-based
or equity-based crowdfunding is best
for their venture and should think
about what kind of rewards would be

Often, the most
successful
crowdfunding projects
are those that leave
donors and potential
donors feeling
personally, not just
financially, invested."
appropriate for donors. When creating
a pitch, remember to consider what
community members would hope to
gain by the venture succeeding.
Also consider your audience when
developing a pitch. Crowdtoolz.com
found that 86 percent of crowdfunding contributors, or "backers," are
male and that 66 percent are between
the ages of 25 and 44 - consider this
demographic your target audience.
Next, decide upon a funding goal.
From there, the manufacturers can
select which crowdfunding platform
they would like to use and begin
setting up their online campaign to
start receiving donations.
Moul is a freelance writer based on the East
Coast. He can be reached at 717-451-1301 or
mouljames@gmail.com.

27


http://www.Crowdtoolz.com

ILMA Compoundings – January 2019

Table of Contents for the Digital Edition of ILMA Compoundings – January 2019

Letter From the Ceo
Inside Ilma
What’s Coming Up
Industry Rundown
In the Know
International Insight
Market Report
Business Hub
Counsel Compound
In Network
Member Connections
Portrait
ILMA Compoundings – January 2019 - Cover1
ILMA Compoundings – January 2019 - Cover2
ILMA Compoundings – January 2019 - 1
ILMA Compoundings – January 2019 - 2
ILMA Compoundings – January 2019 - Letter From the Ceo
ILMA Compoundings – January 2019 - Inside Ilma
ILMA Compoundings – January 2019 - 5
ILMA Compoundings – January 2019 - 6
ILMA Compoundings – January 2019 - 7
ILMA Compoundings – January 2019 - What’s Coming Up
ILMA Compoundings – January 2019 - 9
ILMA Compoundings – January 2019 - Industry Rundown
ILMA Compoundings – January 2019 - In the Know
ILMA Compoundings – January 2019 - International Insight
ILMA Compoundings – January 2019 - 13
ILMA Compoundings – January 2019 - Market Report
ILMA Compoundings – January 2019 - 15
ILMA Compoundings – January 2019 - 16
ILMA Compoundings – January 2019 - 17
ILMA Compoundings – January 2019 - 18
ILMA Compoundings – January 2019 - 19
ILMA Compoundings – January 2019 - 20
ILMA Compoundings – January 2019 - 21
ILMA Compoundings – January 2019 - 22
ILMA Compoundings – January 2019 - 23
ILMA Compoundings – January 2019 - 24
ILMA Compoundings – January 2019 - 25
ILMA Compoundings – January 2019 - Business Hub
ILMA Compoundings – January 2019 - 27
ILMA Compoundings – January 2019 - Counsel Compound
ILMA Compoundings – January 2019 - 29
ILMA Compoundings – January 2019 - Member Connections
ILMA Compoundings – January 2019 - 31
ILMA Compoundings – January 2019 - Portrait
ILMA Compoundings – January 2019 - Cover3
ILMA Compoundings – January 2019 - Cover4
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