Rewards based crowdfunding

Bootstrapping Term

The best known type of crowdfunding is specifically rewards based crowdfunding which, as it sounds, provides different levels of rewards in return for cash. It is one of the most visible ways to bootstrap your company, in that customers can pay you in advance of the product or service delivery. Customer cash paid early is almost always the best way to fund your business, if possible.

Kickstarter is the number one online platform for rewards based crowdfunding. Many Kickstarter campaigns are creative projects (most notably movies and videos) in which the rewards are a mix of product and special recognition. Some of these campaigns could be considered a hybrid of bootstrapping and grants, in that the special recognition reward is similar to what donors receive in many non-digital grant contexts.

Don Gooding

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