Crowdfunding 101: Is It Right for Your Business?

If you’re looking for creative ways to raise capital without taking out a loan or giving up full control of your business, crowdfunding might be the answer. It allows you to raise funds by collecting small contributions from many individuals—usually through an online platform.

Types of Crowdfunding

Rewards-Based – Offer a product or perk in exchange for support (e.g., Kickstarter, Indiegogo).
Equity-Based – Offer shares in your company (e.g., Wefunder, StartEngine).
Donation-Based – Donors give without expecting a return (e.g., GoFundMe).
Debt-Based – Borrow funds and repay supporters (e.g., Kiva, Honeycomb).

Why It Can Work for Small Businesses

Funding Without Loans – Avoid traditional debt.
Build Early Buy-In – Supporters become your first customers and brand advocates.
Test the Market – Gauge demand before fully launching.
Create Buzz – Drive awareness while raising money.

What to Plan Before You Launch

Choose the right platform for your goals.
Set a realistic funding target and fulfillment plan.
Develop a strong pitch with visuals and video.
Promote the campaign through email, social media, and your network.

Tips for Success

Tell a compelling story about your business.
Be transparent about how the funds will be used.
Keep supporters updated throughout the process.

Get Help From UMW SBDC

Crowdfunding requires strategy. The University of Mary Washington SBDC can help you:

Develop your pitch and business plan
Choose the right platform
Create a promotion and fulfillment strategy

Schedule a free consultation with a certified advisor to see if crowdfunding is a good fit for your business.

Bianca M. Guzman, Business Consultant