The Different Types Of Crowdfunding Methods To Choose From

The best thing that Kickstarter clones offer to fundraisers is the ability to choose the kind of crowdfunding they want. Choosing the right kind of crowdfunding method is very important for any entrepreneur because it may determine how their business will be affected it has been started. While you look forward to being listed in a Kickstarter clone website, ensure that you choose wisely among the following crowdfunding methods.

Debt : debt crowdfunding works almost like a bank. It involves many backers who will give the fundraiser money to start their business, but the money is a debt. This debt should be paid after some time, and there will be a certain interest rate that will be applicable.

Equity : this crowdfunding module is almost like the royalty crowdfunding, but it takes things to a higher level. Instead of getting some amount of money from the revenue collected from a business funded by the backer, the backers get ownership right. In choosing this kind of funding, you have to be very careful and debate whether or not you are ready to share ownership rights for your business after it has started and it has grown to an empire. Sharing ownership rights is not like paying a debt and moving on. It is something that will bind your business to the backers for a very long time. It makes them shareholders. Also, this type of crowdfunding is not easily gotten unless the business has been in existence for a long time.

Royalty : this kind of crowdfunding will involve the paying of a certain amount to the backers after the business has been started. It is like paying royalties to an artist, but this is in a different context. For example, if backers fund the launch of software, when the software has started bringing in revenue, the owner of the software will have to pay some amount of money to the backers from the revenue collected.

Donations And Rewards : donations are made by backers whose only interest is seeing that a business is started or the product is built. On the other hand, reward system involves giving the backers some benefits or perks for their contribution. One of the ways can be offering them the products you are selling for free. It is a kind gesture.

As you look for a Kickstarter clone website, ensure that the crowdfunding options presented to you are what you need. This way, you will have many options to choose from.