Entrepreneurs with a new business or service can seek fund donations to get launched through a variety of website platforms. In contract to equtty-based platforms where contributors are investors seeking a return on their investment, donation-based seek to foster artistic-type endeavors. These contributors may be more incentivized, however, if they were to receive a unique gift for their contribution.
Many of the donation based websites, such as Kickstarter.com, focus on a certain niche. Whereas Kickstarter may seek to promote artistic endeavors, Appistore.com focuses on certain technologies, and Crowdrise.com looks to help charitable causes. Each website platform also provides unique placement terms, including amount of commissions, duration of the campaign and more.
The upside to raising money through these portals includes: avoiding security laws; raising funds without providing equity or management operations; an effective means of marketing the brand, product and/or service; and commissions are typically much less expensive than other means of raising funds.
The downside is letting the world know about your idea before it’s truly in the stream of commerce. There is a chance of fraud or theft or noncompliance with laws by a new platform.