Crowdfunding represents a global market estimated at $3-5 billion (U.S.), based on a tally of dollars contributed to crowdfunding projects in 2013 (source at bottom). And that number's only getting bigger according to a January report by TD senior economist Sonya Gulati.
For women entrepreneurs who plan to spend this year's International Women's Day pondering their next business idea, crowdfunding platforms like Indiegogo, Kickstarter, and RocketHub can help turn these dreams into reality. Here are ten reasons why:
1. It validates. Success in crowdfunding attracts investors. Toronto-based InteraXon, led by Ariel Garten CEO, received $6-million from OMERS and other Canadian funders after raising $300,000 on Indiegogo for her brain‐sensing headband MUSE.
2. It informs. The span of a campaign can reveal exactly what your customers want and how best to give it to them. Sizes, colours, functions? Your customers tell you what they want. Beyond facts, running a campaign will teach you how to manage media, market demographics, and pressure like a pro.
3. It's simple. A crowdfunding campaign doesn't require a huge loan or venture capitalist backing to get started. Just a computer and a product or service worth buying. And no need to move to the big city first.
4. It's fast. The average crowdfunding campaign runs between 30 and 45 days. In just over a month you'll know whether your project is a hit or miss.
5. It's friendly. Walking away with the capital is great, but making friends along the way has value too. Isabel Hoffmann, CEO of Tellspec, used crowdfunding for their device which analyzes the chemical content of food. "The community and the platform were amazingly supportive. I've seen misogyny in tech but not one instance of it in my crowdfunding experience." Last winter this support returned in a seasonal way: "I received more Christmas cards last year than any year in my life! That had to be from our campaign. There's no other explanation."
6. It's attention-grabbing. The media loves a good crowdfunding story. Joanna Griffiths's company, KNIX underwear, received coverage from Forbes and Fast Company after her crowdfunding campaign went live and now she's doing her second crowdfunded campaign.
7. It's practical. Victoria-based Karrie Hill used Indiegogo to fund her foodtruck, Deadbeetz. "The people who want to support you are your peers, your community – if your buddies all kick you twenty bucks, all of a sudden, you're at $8,000, launching your food truck."
8. It connects. Offline, Ms. Garten might not have had the means to market MUSE in Japan, for example, but her campaign allowed her to see, sell to, and nurture these communities, even beyond the campaign.
9. It's fun for would-be customers. "For customers, It's innovative shopping – a way to find cool new things that wouldn't be on magazine covers or in articles," according to Vicki Saunders, CEO of SHeEO who is currently crowdfunding a mentoring book for women entrepreneurs. "And you get to watch yourself earn money for daring to voice your dream–there are worse ways to spend your time!"
10. It works. Forty-seven per cent of all successful campaigns on Indiegogo are run by women. Vancouver-based platform Fundrazr's announced that over half of their successful campaigns are woman-driven. While Kickstarter doesn't post an estimate of female campaigners, in a recent announcement they noted that funders for projects include a good number of Grandmas and Moms (or at least people who go by that name when funding projects online.)
"Women are nearly four times more successful when crowdfunding than raising capital through traditional means," says Danae Ringelmann, founder of Indiegogo. "The number of female-owned businesses that receive venture funding is only about 13 per cent whereas the percent of entrepreneurial campaigns run by women that meet their funding targets on Indiegogo is around 47 per cent. This is a great example of how democratizing finance helps ensure women are on a completely level playing field with men."
If it worked for them, it can work for you. For help choosing the right platform check out the National Crowdfunding Association of Canada.
Sumari MacLeod is a Vancouver-based writer covering trends in consumer technology and crowdfunding.