|Crowdfunding Your WebSite Project?|
Has anyone tried This Approach?
Alright, it may seem silly, but has anyone looked into crowdfunding for their web development projects? I have so many crazy ideas for websites and web services, but don't currently have the funding. I read a low at the various Entrepreneur forums and crowdfunding sites like [crowdfundingforum.com ], and [Sitepoint.com ], and came to the conclusion that it may be possible to launch a crowdfundign campaign on Indiegogo for my next big project.
I have also considered turning to one of the equity crowdfunding platforms like TheFundersClub.com. Anyone with opinions and or experiences that could help me out here?
It just seems like Crowdfunding is growing at such a fast pace.
The main problem I see is that you have to make the idea for your site public before you even start working on it. If you have a great idea, there's nothing to stop someone from taking your idea and getting it to market sooner than you.
Alternatively, if your idea isn't great, then why would anyone want to help fund it?
It seems like a no-win situation in both cases.
However, if it's an issue of trying to get funding for the redesign of an existing site and the approach is along the lines of "Please help me redesign my poor, old-looking site"- that might work, especially if you have a loyal community of members who would genuinely like to see the site improved.
What if I file for a patent prior to launching a crowdfunding campaign. Is that feasible? Or even if not, I would have a first movers advantage and be able to get my product to market first.
Has anyone here ran a crowdfunding campaign on any of the various platforms?
I wouldn't worry that much about patenting the idea at least not at the begining, but that's just me. Rather put all your energy into developing your site. Facebook never had a patent on social networking but outranked hi5, orkut, myspace and etc...
What if I file for a patent prior to launching a crowdfunding campaign.
I am actually thinking of doing the same but not sure if I'm ready to put myself out there just yet! I'd be curious to read what others have to say! Btw I'm more looking into KickStarter.
Best of luck anyway.
|It just seems like Crowdfunding is growing at such a fast pace. |
I think it is too. And that's going to become a problem sooner rather than later. Already I'm seeing too many people looking at it as a source of free money. Public response seems to be good in many cases but I feel it's because it's a new concept that has been exploited to the tilt point yet.
When it does hit tilt it will become more obvious of what's happening. As a result the public will probably back-off. That's too bad because there really are a lot of good ideas out there that can benefit from this type of funding.
Like everything else, greed will go a long way to killing it. I'm not directing that comment to anyone in this thread. It's just my general observation.
As an example I think Phonebloks would somehow qualify for some sort of crowdfunding to keep the concept moving forward yet the originator of the idea has chosen to not exploit that avenue in spite of the fact that his concept is not for personal gain but for collective progress in many ways.
You Know I do remember seeing Phonebloks on Kickstarter then canceled. As with patents, I d think they are somewhat important. Facebook really couldn't patent anything since myspace was already around, and it wasn't a physical product. If I was creating say a 1 wheeled bike that used gyro, I would certainly look at getting a patent.
A question I have about crowdfunding is, doesn't about half of what you raise go to taxes?
|doesn't about half of what you raise go to taxes? |
Not likely. With state income taxes added in, the highest tax rate may be somewhere around 50%. But anyone with revenues high enough to be taxed at that rate should have ample resources beyond crowsourcing.
Unfortunately, financing resources are RARE! Trust me, I've been trying for years.
To market 46 websites, I need a marketing budget of around $100k /month (which is only $72 /day per site; at $2 /click, that's only a potential of 35 new visitors a day). But I don't bring in that much money yet. I have a ton of potential, but it's that Catch 22; without the money to market, I can't bring in the money to pay for marketing.
Banks can't help, and I'm not willing to sacrifice the company to private investors. After that, there's not a whole lot of alternative!
I've considered crowdfunding (maybe offering a small percentage of future revenues in exchange for larger contributions), but taxes are a big concern. I could raise $100k, but then only get $50-60k after taxes, which isn't really enough for a good campaign; then, a weak campaign might not result in any return, and just waste everyone's time and money (except for Google, maybe).
I was refering to companies whose revenues put them in the top tax bracket.
|Unfortunately, financing resources are RARE! |
|could raise $100k, but then only get $50-60k after taxes |
Income taxes are on profits, not direct income. (Although if you're unfortunate to be located in some areas, like Los Angeles city, there is a tax based on revenues.) So if you raise $100K and spend $100K, that's a net profit of $0, on which $0 is owed for taxes.
That's assuming the IRS decides to treat it as income (the last I heard, they still haven't issued an official ruling).
If they instead treat it as an increase in capital, there's no immediate tax. (When you/the investors cash out of the company, then there would be a capital gains tax on any gains on the investment at that point.)