By Juliana Taylor
ACCRA - There will always be the more traditional ways of raising funds to start your business, an interesting concept I recently came across though is Kickstarter. The website is an online platform through which inventors can share their ideas, set funding targets for themselves and deadlines by which they expect to meet this target. If a project is able to meet or exceed its goals, it will receive the full amount of money raised (less the fees deducted by the website and Amazon, which support the platform).
In order to raise the funding, inventors set up a tiered reward system. For example, an inventor might promise that for every $15 donated, individuals will get a 20% discount when the product is released and for every $25 donated, individuals will get the item “free of charge” (the assumption is that the donation amount is less than what the price of the product will be when it comes to market). The benefit is that the inventors raises money, gets feedback and as individuals enjoy a positive experience with the product, they promote the product by word of mouth.
Currently, Kickstarter is the world’s largest funding platform for creative projects. The site accepts ideas across disciplines including Art,Comics, Dance, Design, Fashion, Film & Video, Food, Games, Music,Photography, Publishing, Technology and Theater.
As with any idea, Kickstarter does have its disadvantages.
1. The fees: The website and Amazon.com both deduct fees for facillitating and processing the transaction. Therefore, you won’t have every last penny of the money you raise, but you do gain exposure and a transparent way to showcase your product and raise funding for it.
2. All or nothing: Kickstarter runs on an all or nothing principle. If you’re able to raise your target amount of funds by the deadline you set, then you get the money, if not then you lose it. This is slightly different from traditional fundraising where even if the amount you raise is below the target, you do get to keep what you are able to raise.
3. Gaining support: Some users of the site argue that there is a bias in terms of which ideas are easily viewable by those who wish to fund projects. They argue that certain projects have an advantage and therefore get the funding. I have not evidence to prove or disprove this point, so the best advice I can give is to do the research and have an informed opinion.
4. Promotion: To meet your goals it essential that you promote your idea and encourage people to fund it. Make use of your personal network and ask them to pass along the information, don’t solely rely on people stumbling across your profile on the site.
5. Protecting Your Ideas: This is a public website and there is no guarantee that there will not be individuals trolling the site for ideas to copy. So before you post your idea, make sure that you’ve taken the necessary legal measures (for example, patents and copyrights) to have it protected.
Juliana Taylor is the founder of Start Smart Ghana Ltd. She can be contacted on email :firstname.lastname@example.org