04 Jan What is crowdfunding?
If you are thinking of starting a business or you know someone who is doing it, you are interested in knowing what crowdfunding is. This concept came to democratize investments and has given a phenomenal boost to hundreds of businesses and startups.
Now, if you don’t have enough money to invest, you don’t need to ask for a loan from a bank, a grant or ask your mother-in-law for money. The arrival of the internet and crowdfunding have opened a new path to avoid those evils.
Crowdfunding is a collective funding network, which in general is developed online and tries to get funding for a certain project in exchange for rewards.
How does Crowdfunding work?
Online crowdfunding works like this: you can apply your project in any crowdfunding platform and other people can support it to become a reality through small contributions.
In return, you decide to reward those users once the project is launched. Whether it’s through discounts, prizes, free subscriptions or whatever you can think of.
What does it take to create a Crowdfunding?
In most crowdfunding platforms the dynamic to get funding is the same:
2- Send documentation about your project
3- Indicate the days you want to be exposed to funding
4- Offer the rewards.
Pablo Iglesias’s Podemos party has used crowdfunding as a tool to finance its electoral campaigns.
What is the best crowdfunding platform?
There are different options and each user will find which one best suits their particular needs. Anyway, below I will make a brief summary on which, in my opinion, are the 3 best crowdfunding platforms:
You’ve probably heard of Kickstarter since it’s the Queen of crowdfunding platform. More funds have been raised on this website than on all the other platforms put together.
It is focused on creative projects and for this they have created various categories among which you can include your project: Art, Dance, Comics, Design, Fashion, Cinema, Gastronomy, Games, Music, Photography, Publications, Theater and Technology.
If you are looking for financing for a product, they will demand a real prototype of it so that users can see the product in which they are going to invest and are not deceived.
In case you get the desired funding in the stipulated time, the platform will send it to you and will keep the 5% commission. If, on the other hand, you don’t get the proceeds, the money will be returned to the donors.
If you want to know where to do a crowdfunding in Europe, Ulule is the most recommended platform as it leads the European market in this type of financing. Has a presence in Spain and an office in Barcelona since 2017.
It has more than 21,000 projects financed with a value of more than 100 million euros and its operation is similar to that of Kickstarter
In the event that the project does not reach the predefined figure within the chosen time, the funds will be returned to the donors. On the other hand, if it does, different fees will be charged depending on the medium used:
– 8% (including VAT) for funds raised by credit or debit card.
– 4.18% (excluding VAT) for funds raised via Paypal or cheque.
The platform receives all kinds of projects and every year there are more than 7,000 projects presented in search of funding in categories such as: Movies, Videos, Music, Solidarity, Editorial, Journalism, etc.
Verkami is the largest crowdfunding platform in Spain and was created in 2010 by Jonas Sala and his children. Approximately 500 projects are financed every year on this platform and has achieved the European record of crowdfunding with the collection of documentary l’endemà (with more than 350,000 euros collected).
So if you are looking for crowdfunding platforms in Spain do not hesitate to promote your project in Verkami in any of the categories it offers.
Film and music are the most effective projects on the web, but the range of possibilities is immense.
As in the previous ones, if you meet the financing objectives, you will keep the money. If not, the money will be returned to your donors.
Verkami’s commission is 5% per successful project and you have 40 days to meet the target.
Remember that if you want to participate in any of these platforms, either as a creator or as a donor, you can do it safely with our Bitsa Card. A card designed exclusively to make purchases and payments online safely and without relying on banks.