Welcome to Friday. Last week, I asked you to ask yourself some questions that will help you figure out how you want to fund your social venture. If you missed that, or any other lesson in Social Entrepreneurship 101, you can always click here for the audio lessons.
During the next few weeks, I’m going to walk you through the top resources I know about that are specifically geared toward funding purpose driven startups. These are the organizations that I learned about from talking with hundreds of social entrepreneurs, but there are more popping up every day. Go towww.socialchangenation.com/resources/ for a list that’s constantly updated.
Startup cash for Social Entrepreneurs can be divided into three main categories: crowdfunded cash, venture cash, and fellowships. This week, let's focus on crowdfunding for social entrepreneurs:
If you haven’t heard of crowdfunding before, it’s essentially a social network for raising cash. People post profiles about different projects they want to fund, from businesses to charitable endeavors, and other parties give money to the project. Oftentimes, the ‘donors’ are giving this cash in exchange for gifts. For example, let’s say you wanted to crowdfund your first product. You could create a profile, share your story, your purpose, and ask people to contribute in exchange for being the first group to benefit from your product/service.
Let’s check out the top resources:
1.) Indiegogo – This is one of the most well-known and well trafficked crowdfunding platforms. It’s also known for being more ‘cause’ focused, making it a natural fit for those of us in cause based business. Hostel KC is a purpose driven hotel I work with that had huge success with Indiegogo. Hostel KC promises to build a home for the needy with every 300 beds booked. It’s in startup mode, but its founder didn’t want to wait to start living out her cause-driven mission. So, she took to Indiegogo, shared her dream, her love for the people of Jamaica (where she was building the house), and raised plenty of cash to jumpstart construction of their first donated home. You can check out Hostel KC’s Indiegogo page here. I’m proud to report that the house is fully funded and will be built in Jamaica in early June. Check out this video interview I did with Hostel KC founder about her successful campaign.
Raising money on Indiegogo certainly wasn’t a walk in the park. If you’re going this route, you’ll need to follow Hostel KC’s lead: be proactive about asking your local contacts for money, building buzz through social media & news releases, and, most importantly, offering incentives. Donors to Hostel KC’s campaign could receive books, free nights at the hotel, and even a trip to Jamaica, depending on the amount given. You will have to incentivize people to give if you hope to be successful with Indiegogo.
2.) WonderWe – The new kids on the block. WonderWe combines the best of social networking with the best of crowdfunding. It's also exclusively dedicated to crowdfunding for social causes. Because they are newer, competition for dollars is less intense, making this an option you should definitely check out.
3.) Start Some Good – As one of the fastest growing crowd-funding sites, this is a great place for social entrepreneurs because it is purpose based. They also are a smaller community in comparison to Kickstarter, so you can get more attention here. Start Some Good is also one of the most supportive crowdfunding teams I’ve seen. If they approve your cause to be listed, they’ll work with you to help make it a success. Check out some examples of how they help here.
4.) Crowdrise – Crowdrise is specifically geared to raise money for charitable (non-profit) causes. But, this can be a great fit for you if you want to raise cash and build some buzz for the non-profit your business will support. For example, in the Indiegogo section I talked about Hostel KC raising money to build a home in Jamaica. Hostel KC partners with Food for the Poor, a non-profit that has been building homes for the poor for thirty years. The money Hostel KC raised went to Food for The Poor, and allowed Brittain, the Hostel’s founder, to start donating to her cause much earlier than she might have otherwise.
If you don’t want to wait to make a large donation to your charitable partner, Crowdrise may be a great tool for you. In the process, you’ll have a large platform to tell the story of the business you are creating to sustain that initial impact.
5.) Pozible – ‘An agile platform for dynamic, inspired people’. This is pozible’s mantra, and it shows why this platform can be the perfect fit for us. While it is not exclusively for social entrepreneurs, it is a hub for creatives, inspirers, and do-gooders of all stripes, so its audience could be a natural fit for you. Definitely worth checking out as a potential option.
Final note: Crowdfunding sites vary widely in terms of how they profit (usually they take a small percentage of funds raised), goals you have to meet, and types of projects they allow. It is critical that you develop an understanding of these things so you can find the platform that is best for you. I’ve given you a very brief overview here, but I highly recommend you grab a tool like The Crowdfunding Bible or The Crowdfunding Book that will get you the inside scoop.
-Josh
@joshschukman
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Social Entre 101: crowdfunding for social entrepreneurs
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