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Traditional bank financing is no longer the only option for entrepreneurs and founders. Crowdfunding offers a modern alternative that helps you raise capital and build an engaged community at the same time. This innovative financing method enables many people to invest small amounts in your project. In this way, the sum of all contributions creates the required capital. Crowdfunding not only changes your financing strategy, but also your relationship with customers and investors[1].
How crowdfunding works
The principle of crowdfunding is simple but effective. You present your project or business idea on an online platform. Interested people support your project with financial contributions. The platform acts as an intermediary between you and the backers.[3] Crowdfunding works without complex bureaucracy or long approval processes. Instead, the crowd decides directly on the realisation of your project[1].
The speciality lies in transparency. You need to present your idea clearly and convincingly. Potential supporters want to understand what their money is being used for. This openness creates trust and at the same time builds a loyal community[9].
The different models of crowdfunding
Not all crowdfunding is the same. There are several models that pursue different goals. In reward-based crowdfunding, supporters receive something in return. A product designer could present their new gadget on a platform. Early supporters receive the product at a reduced price.[2] Examples include projects on Startnext, where creative people present their ideas[10].
The donation-based model is about donations without receiving anything in return. Non-profit organisations and social projects use this approach. Platforms such as Betterplace make it possible to raise money for important causes quickly and unbureaucratically.[2] Regional initiatives also benefit: 99 Funken combines crowdfunding with local support from savings banks[2].
Equity crowdfunding is interesting for growth companies. Investors receive company shares or profit shares. This makes it easier for young, innovative companies to find capital than through traditional channels.[7] Finally, crowdlending is a type of loan from the crowd. Borrowers pay back interest, similar to a bank, but the lenders are private individuals or smaller investors[3].
The advantages of crowdfunding for your company
Why should you consider crowdfunding? The reasons are varied and convincing. Firstly, you receive capital without traditional collateral. Banks often require land register entries or personal liability. With crowdfunding, it is your idea and its persuasiveness that count[5]. You also retain full control over your company. There are no invasive investors who have a say in your business decisions[13].
Crowdfunding saves you time and money. There is no need for complex credit checks. All you need is a convincing project presentation and a convincing pitch[13] and your project can be financed after just a few weeks. In contrast, bank financing often takes several months.
An often underestimated advantage is market validation. Before you make large investments, you can find out whether people really want to support your idea[5]. This feedback is priceless. You avoid costly mistakes and can refine your concept.
Community building through crowdfunding
A key advantage of crowdfunding is the creation of a community. Your supporters become fans of your project. They share your vision on social media and talk to friends. This organic word of mouth is pure marketing. Crowdfunding not only creates financial resources, but also emotional connections[9].
The backers of a crowdfunding project often become the first customers. They have already invested money and have an interest in success. This group is loyal and gives honest feedback.[5] You can use this relationship later for product development, market research or future financing.
The best crowdfunding platforms at a glance
Which platform is right for your project? Germany's largest crowdfunding platform is Startnext[6][10] Startnext focuses on creative and sustainable projects. The fee structure is transparent: freely selectable commissions when you reach your goal.[8] Examples of successful projects on Startnext show the diversity: from art installations to innovative products to social initiatives.[10]
GoFundMe is the world's largest social fundraising platform. It offers a security guarantee for donors and has a donor base of over 200 million people.[2] Betterplace.org is Germany's largest donation platform and ideal for charitable causes.[6] 99 Funken combines crowdfunding with regional support.[2] This platform, initiated by Sparkasse, does not charge any fees at all for projects co-financed by Sparkasse.
For international reach, Kickstarter is a well-known option. Ulule combines a pan-European presence with a focus on innovative and community-orientated projects.[4] WhyDonate advertises premium features at no extra cost and is Europe's largest crowdfunding platform.
Specialised platforms for your industry
There are specialised offerings depending on the sector. EcoCrowd focuses on sustainable ideas and projects with a success fee of four per cent[12] VisionBakery is Germany's second largest crowdfunding platform and offers free personal support[6] Crowdsupply is aimed at tech and electronics projects with special requirements in terms of originality and benefits[12].
Specialised platforms exist for regional projects. Nordstarter Hamburg supports artists, creatives and inventors in northern Germany.[6] SPONSORT combines crowdfunding with sponsorship at a regional level.[6] Local savings bank initiatives such as WIR BEWEGEN.SH in Schleswig-Holstein enable regional financing projects.[6]
Crowdfunding for different types of companies
Start-ups and founders benefit from crowdfunding
Crowdfunding is often the first realistic financing option for start-ups. Banks rarely grant loans to founders without collateral and a track record. Crowdfunding breaks this vicious circle.[11] A founder with an innovative app idea can show their vision directly to the public. If the idea is convincing, the capital flows.
Start-ups benefit in particular from market testing. They validate their business idea before they go into production.[5] For example, a start-up develops a sustainable coffee filter. Through a crowdfunding campaign, they find out how many people would buy the product. This allows them to plan quantities better.
At the same time, an initial customer base is created. The campaign supporters become brand ambassadors. They share the project in their networks and expand the reach organically[5].
Creative professionals and artists use crowdfunding strategically
Artists and creative people have long struggled with funding problems. Traditional investors are rarely interested in artistic projects. Crowdfunding fundamentally changes the playing field.[4] A filmmaker can realise his independent film through crowdfunding. Artists finance exhibitions, music productions or book publications.
Startnext shows examples every day: Illustrators present their art books, musicians produce their albums, designers present innovative products[6][10] The platform is specially optimised for this target group. They not only receive money, but also recognition and an audience for their work.
Social projects and charitable organisations
Non-profit organisations chronically struggle with budget shortages. Crowdfunding opens up new sources of funding. Betterplace.org is ideal for such purposes.[6] A charitable organisation can present its specific vision. The crowd decides which projects to support.
99 Sparks combines crowdfunding with local solidarity. A regional youth project can present its initiative to the community.[2] The local savings bank often provides additional co-financing if the crowd signals trust. This is crowdfunding with local added value.
Strategies for a successful crowdfunding campaign
The right preparation for crowdfunding
A successful crowdfunding campaign does not happen overnight. Thorough preparation is essential. You need to know your target group. Who should support your project? What motivates these people? A clear answer to these questions is fundamental.
Define your financing target realistically. How much capital do you really need? Also factor in the platform's fees. Startnext, for example, charges four per cent transaction fees.[8] Your campaign duration should be between 30 and 90 days. Startnext allows 90 days as standard[2].
Create professional materials. An appealing video explains your project emotionally. High-quality photos show your product or initiative. Write a convincing project description. People need to feel your passion.
Communication and marketing during crowdfunding
Crowdfunding is active communication. You can't just post and hope. Regular updates keep backers engaged. Share progress, challenges and new insights.[9] This transparency builds trust and motivates more backers.
Use social media strategically. Each major platform - Facebook, Instagram, LinkedIn - has different target groups. Customise your message. A tech startup appeals to different people on LinkedIn than on TikTok. Authenticity and consistency are key.
Mobilise your personal network. Family, friends and colleagues are often the first supporters. Their trust in you personally is high. These first backers give the project credibility. See others: People who know this person already trust the project.
After the campaign: successful project management
The campaign is successful - the funding target has been reached. But now the real work begins. You have to deliver. Your supporters have trusted you and given you money. Keep in regular contact. Be transparent about progress and delays.
Many projects suffer from delays. Material prices rise, supply chains are interrupted. Communicate proactively when timelines shift. Honest communication maintains trust. A product developer who hides the fact that delivery will be three months later loses credibility.
Use the resulting community for feedback and improvements. Your supporters have concrete suggestions. They are often a great test audience. This close relationship is an asset that is not available to you with traditional financing.
BEST PRACTICE at the customer (name hidden due to NDA contract): A sustainable fashion brand launched a crowdfunding campaign for the launch of a new, eco-friendly collection. They combined personal storytelling with professional marketing. They used social media to show the manufacturing processes and material sources. The community developed during the campaign itself - a network
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