Five online fundraising sources every entrepreneur should know

Great ideas are plentiful, but the money to make them work isn’t always as easy to come by. One way to get your business idea or project off the ground is to forget about bank loans and instead askinvestors–people who actually want to see your idea succeed–for alittle pocket money.

If you have a creative project idea, you can solicit funding fromstrangers for it with this popular site. Kickstarter‘sclean layout allows people from all over the globe to peruse projectsand contribute as little as a dollar or as much as the donor can afford.

Kickstarter requires that you set up a page describing yourproject (audio and video pitches are encouraged) and set atime period for people to pledge money. For different donation amounts,project creators usually offer gifts, such as a signed album or freedownloads of the project when it’s finished. If your Kickstarterreaches its funding goal, you keep the money; if not, it goes back tothe patrons. The great thing about the site is that 100 percent of themoney you raise is yours–and Kickstarter will never keep any intellectual or property rights onyour project. A little under half of all Kickstarter projects are fullyfunded.

Although ChubbyBrainwas still in alpha at the time of this writing, you can currentlyrequest an invitation code to gain free access to its first publiclyreleased algorithm, the Funding Recommendation Engine. The algorithmstatistically breaks down the aspects of your company in order to matchyou with the appropriate sources of funding–from grant providers toventure-capitalist firms to well-known angel investors–based on theinvestors’ history of funding. This way, you don’t waste time pitchingpeople and grant institutions who aren’t interested in the kind of workyou do. Also, if you don’t have time to wait for an invitation to thenewest features of ChubbyBrain, you can still use its free database ofinvestors to narrow down which ones might be interested in your idea.Or, just sign up for the site’s newsletter, which will send you fundingtips.

A sort of selective Craigslist for funding, RaiseCapitalallows people with business ideas to post text, photos, and videosabout their projects to attract some money. That kind of funding ishelpful at a time when bank loans are hard to get. Entrepreneurs canlog in after paying a one-time $99 fee, and they receive a unique URLon the site as well as a visit counter to track how many people haveviewed their posts. The network of investors who are interested in aparticular category receive a daily update showing all the newbusinesses registered the day before. features new businesses in a video presentation. Charities and nonprofits are allowed to post for funding, as well.

RaiseCapital also lets investors register with the site so that they can be in on the newest ideas that have the potential to make a lot of money. Investors large and small register for free and anonymously.

OnGreen–whichfocuses on business ideas and patents that are a part of the green economy–tries to bring inventors, entrepreneurs, and investorstogether by creating a “social marketplace” to connect startup businesses with thefunding they need and the new technology that might help them moveforward.

Investors can browse “Deals” in which entrepreneurs–pitchingeverything from energy-efficient window-pane-installation companies tourban-farming startups–list how much funding they need and describethe business’s model. Entrepreneurs can also browse patents toincorporate into their operations, so inventors have a way to markettheir products more efficiently. Matching investors and entrepreneurswho are passionate about the environment and great inventions, OnGreen is a great place to mine increasing popular support for green projects.

Venture Hacks
Run by two former entrepreneurs and investors who put money in Twitterin its early days, VentureHacks is primarily a how-to site for the serious entrepreneur. The advice that you can subscribe to on the site will help you learn how to pitch your idea, find investors, and turn your small startup into a bigger business. The site sells ebooks that give you the rundown on practical concerns such as how to choose a cofounder, or how to break down who owns what in your company.

You can also join the site’s AngelList, a social network of large and small budding projects and businesses. From the AngelList, you can search for investors, as well, narrowing down who you pitch by yourcompany’s location and the market that you intend to serve.

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Jim Love, Chief Content Officer, IT World Canada

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