You might have heard of crowdfunding. It’s a method of appealing to the Internet for lots of small donations for a project. In return, you offer incentives for different donation levels. It might be a way to get your store open or to help finance growth for an existing store.
The largest stumbling block when trying to open a business is an inability to finance. Crowdfunding doesn’t require a credit check, monthly payments, or collateral. Anybody can do it.
What Makes a Good Candidate?
A large following. If you have an active tournament base, that’s good. If you have multiple game groups meeting at your store, that helps. If you’re a game demo volunteer for a large company, that can help.
Something to offer. Game stores are great for that. You can offer products and prestige for your incentives.
Enthusiasm. Passion sells. If you can make a great video, you’re definitely a good candidate.
A story. Having a good story to tell almost guarantees success.
How Much Does It Cost?
- Advertising, up to $500. A small amount goes a long way
- Incentives, about 50% of the total amount. The relatively high cost of your incentives is offset by the number of donations you’ll receive.
- Host fees, 4% or 9% of the total amount. The hosting site takes 4% as its cut. If you don’t meet your goal, you can still collect your money, but the fee increases to 9% if you do.
- Management Fees, 3% of the total raised. Our fee for guiding you through the process. That’s about what you’d pay to secure an SBA Loan.
You’ll notice that the only cost up front is a small amount for advertising. It’s very possible for you to gain $5,000 in financing while only going $200 out of pocket. You pay out the rest after the money goes into your account.
How Much Can I Get?
A game product recently exceeded $1.2 million dollars through crowdfunding. Another, more recently, broke $900,000. The average successful project earns between $5,000 and $10,000. That amount could open a shoestring model store or serve as the owner contribution toward a conventional bank loan for a larger store.