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Kickstarter vs. Peerbackers – Choosing the Right Crowdfunding Site for You

Posted by on Aug 21, 2013 in Crowdfunding, Entrepreneur, Kickstarter, Peerbackers, Projects | 0 comments

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Isn’t the internet wonderful? In this modern day and age, the startup now has easier access than ever to enter the marketplace. With Facebook, Twitter, Google+, and other forums, gaining exposure is not as cumbersome as it used to be. But bringing your product or service to the masses still takes some amount of funding. With the economy in the current state its in, going to the bank for a loan isn’t really feasible. And sure there’s the venture capitalist, but what if your startup or project needs smaller amounts to get going? That’s the beauty of crowdfunding. It gives startups an opportunity to raise funds for a project without going into debt. But there are a lot of crowdfunding sites out there. So today we are focusing on 2 that I really like: Kickstarter and Peerbackers.

Kickstarter – Started in 2009, Kickstarter offers creators a chance to gain funding for their projects in exchange for rewards. The rewards must be related to the project. For example, if you’re trying to raise funds for a movie, you can offer tickets to the premiere of the movie. A pair of socks would probably be rejected as a reward. Kickstarter has an all-or-nothing format. The funds are released only if the goal is met. Once the goal is met, payment is handled through Amazon Payment, so you will need an Amazon account to access your funds. Most of the projects on Kickstarter focus on Arts and Entertainment (i.e. Movies, Documentaries, Books, Music). Also, the funds raised though Kickstarter or any crowdfunding site are taxable. So keep those receipts for your tax records.

Peerbackers – Founded in 2011, Peerbackers offers a lot of the same features as Kickstarter with a few differences. Unlike Kickstarter, Peerbacker will allow you to keep the funds raised if you can reach 80% of your goal and you can deliver on your rewards. Also, the rewards offered do not necessarily have to be connected to the project. Just make sure your rewards are interesting. Peerbackers offers a wider range of projects to support, including non-profit endeavors. Once the project ends, the payment is distributed through PayPal. Remember that funds raised are taxable.

Both Kickstarter and Peerbackers charge a 5% fee. You also have to take into consideration that PayPal and Amazon Payments also charge a fee as well. Keep that in mind when you consider your goals.

Both sites are appealing and user friendly. Ultimately, if you decide to create a project, you will have to put in some work to get it funded. You just have to decide which site would be best for you based on the type of project you are doing.

Image courtesy of ddpavumba at FreeDigitalPhotos.net

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