We've actually lost track of how many 3D printer startups have launched this year. It seems that every week another one shows up on a crowd funding service looking to raise money for their idea, which often takes the state of the industry one step further ahead.
Don't get us wrong; this is the right thing to do. Crowd funding your startup has emerged as a very successful way to launch a new business, particularly those involving tech or modern culture. 3D printing is both of those. Those donating funds tend to be highly passionate, deeply interested patrons.
But how do you do it? Where do you go to get "crowdsourced"? How does crowd funding work?
Fortunately, it turns out there are many great options for the entrepreneur. Most 3DP projects follow the "money for goods" model, in which funders essentially buy the first units produced, thus giving the startup company enough cash to get going. Numerous online crowd funding services exist, but many focus on narrow areas so as to attract people interested in the topic. While there's no specific crowd funding service dedicated to 3D printing, there are two most frequently found in use: Kickstarter and IndieGoGo.
These two services are very similar in operation, but there are two main differences:
- Kickstarter uses an "all or none" approach, in which funding is only turned over to the entrepreneur if the financial goal was achieved or bettered. IndieGoGo instead hands funds to the entrepreneur regardless of whether the goal was achieved. In that case, funders depend on the entrepreneur to deliver the sold goods or return their investment.
- Kickstarter is currently available only to residents of the USA. While the global community can contribute, an entrepreneur in, say, Brazil, cannot launch a Kickstarter project easily. Meanwhile, IndieGoGo does offer global capabilities. Non-US projects are very often seen on IndieGoGo. It's our understanding that Kickstarter will soon enable global participation, however.
While either service can work, it appears that Kickstarter projects tend to gather more money, particularly if the project goes viral on the social networks (hint to entrepreneurs).
So which should you use? Kickstarter seems to have more investors, meaning money is raised more easily, but it's not an option for non-US entrepreneurs at the moment.