Crowdfunding facilitates the raising of capital for a variety of purposes, using numerous variations of the model. The crowdfunding industry is experiencing rapid growth and innovation as people turn to the power of the crowd to fund their dreams.
There are four different types of crowdfunding businesses:-
(1) Donation
(2) Reward
(3) Equity
(4) Lending/Debt.
Within these four types of categories:
Rewards-based crowdfunding (Kickstarter Alternative) incentivizes project supporters to turn great ideas into reality. Rewards crowdfunding involves individuals contributing to your business in exchange for a “reward,” typically a form of the product best rewards based crowdfunding examples service your company offers. Even though this method offers backers a reward, it’s still generally considered a subset of donation-based crowdfunding since there is no financial or equity return.
Kickstarter is the largest rewards-based crowdfunding platform. According to the site, by the end of 2023:-
– People pledged $6.11 billion to projects on Kickstarter
– 308,387 projects have been funded successfully
– 10.4 million people have backed projects
– 2.58 million people have backed more than one project
– 18.8 million total pledges have been made
over $900 million would trade hands-on rewards crowdfunding platforms.
What is rewards-based crowdfunding?
Rewards-based crowdfunding is when people contribute money to a project or campaign in exchange for a reward or product. In this model, the campaign’s person sets different reward levels for additional contributions. For example, if someone is raising money to create a new board game, they might offer backers a copy of the game at a discounted price if they contribute a certain amount of money.
Rewards can vary depending on the campaign, but standard tips might include the following:
- Early access to the product
- Discounts on the product or service
- Exclusive merchandise
- Personalized messages or shout-outs
- Limited edition versions of the product
Rewards based crowdfunding can be a great way for creators to raise money for their projects while also building a community of supporters who are excited about their work. Backers can feel like they are part of the project and helping bring something new and exciting.