Move Over, Kickstarter: 5 New Crowdfunding Sites For Entrepreneurs

With the new SEC rules on crowdfunding and the proven popularity of Kickstarter, more startups are emerging to help innovators get their ideas funded.
Editor, Writer & Content Strategist, Various
October 28, 2013

Last week, the Securities and Exchange Commission voted to propose rules that will allow companies to offer securities through online crowdfunding. Under the law created by last year's JOBS Act, small companies can raise up to $1 million a year through accredited investors. The public has 90 days to comment on the SEC proposed rules.

The new crowdfunding laws—along with the overall success of sites like Kickstarter and Indiegogo—are leading more startups and existing companies to roll out their own crowdfunding platforms for small businesses and startups. Though it may take the SEC more than six months to put out final rules, many sites are already helping businesses connect with and vet prospective investors and donors.

Here are five sites that have recently started offering crowdfunding to entrepreneurs:

1. Upstart.comFounded by ex-Google employees, the site helps everyone from startup entrepreneurs to college students needing tuition to raise money. How it works: Funders provide capital today and then receive a percentage of future income for five or 10 years. To be funded, a project must raise at least $10,000.

2. PlumAlley.co. Launched originally as an e-commerce site featuring products designed by women, the site unveiled plans last week to begin offering crowdfunding for women entrepreneurs.

3. JumpstartFund.com. In beta stage, the site plans to offer startups resources—such as connecting with potential co-founders and collaborating on ideas—as well as the ability to attract accredited investors. Among the first projects: SpaceX and Tesla CEO Elon Musk’s plans for high-speed, solar-powered inter-city transportation, Hyperloop.

4. DragonInnovation.com. The well-known Boston-based manufacturing firm recently launched a crowdfunding platform exclusively for hardware entrepreneurs. The site charges a $5,000 “prep fee” in exchange for help getting set up with manufacturing and other consulting services, according to Forbes. (The high startup fee on the site has sparked some criticism.)

5. HatchFund.org. Created by a nonprofit called AIM, the new site helps artists showcase their work and attract donations. One Indiana dance major, Kristin Dowdy, has raised more than $2,000 for her plans to host a performance called CityScapes that explores “the different personalities of cities, the people, and the landmarks within those cities.”

For businesses reluctant to find investors or donors online, there are other emerging options. LendingClub.com, a peer-to-peer lending network, recently announced it would begin offering small-business loans.

Read more small-business news.

Photo: iStockphoto

Editor, Writer & Content Strategist, Various