Reward-based crowdfunding allows businesses to raise capital from individuals by offering a tangible reward. Kickstarter puts the average amount contributed by backers at $25. Unlike equity crowdfunding, reward-based crowdfunding allows you to retain full ownership of your business. To be successful, you have to market your product or project in a way that resonates with people.
How Reward-Based Crowdfunding Works
Project creators set up a campaign, outline their project, set a funding goal, and specify reward tiers. Backers can browse projects and choose which to support.
Benefits of Reward-Based Crowdfunding
A successful campaign validates your idea. Offering rewards attracts backers without requiring company ownership or repayment. Risks are lower compared to loans or equity arrangements.
Unlike equity crowdfunding, reward-based crowdfunding allows you to retain full ownership of your business. Instead of relying on investors, it allows you to tap into grassroots support.
Project creators set up a campaign, outline their project, set a funding goal, and specify reward tiers on platforms like Kickstarter. Offering rewards attracts backers without requiring company ownership or repayment. A successful campaign validates your idea.