Donations from friends and family were one thing, but when money started coming from strangers in other states and even other countries, Brown’s eyes popped. When all was said and done, Brown’s campaign goal of ten dollars was surpassed by 5,500 percent as his efforts garnered over $55,000.

What Brown did with the funds he raised is the stuff for a different article, but the success of his endeavor was due to a method of generating money that’s gaining a lot of traction: crowdfunding.

Mason Estep, an Ohio entrepreneur whose first start-up, which pertained to crowdfunding but did not offer that platform, sold to a larger entity after only 18 months in existence. While he completes his studies at Ohio University, Estep and some friends, some in college, some recently graduated, have created a new product. Sech’s, an alcoholic beverage whose name is pronounced “sex,” will be launched in Ohio this spring.

For this endeavor, Estep and crew did not need to crowdfund. They used some of the money they earned from selling Standoffer, and investors have ponied up money, as well.

Already a savvy businessman at age 22, Estep offers some suggestions to small business owners or would-be entrepreneurs considering crowdfunding. His tips include:

• Bootstrap. Start hustling and stay hungry to raise money for your company
• Reach out to friends and family. Be confident enough in your idea to invest your own money in it and ask friends and family to do so, too. They usually want the best for you and aren’t likely to request outlandish interest rates or equity in your product
• Outside funding. Determine if and when crowdfunding is appropriate

According to Estep, there are countless web sites or organizations supporting crowdfunding, and no two are alike. He suggests reading the crowdfunding agreement carefully to ensure you understand what you get from the company and what you will owe for their services. For example, determine whether the crowdfunding source seeks a percentage of the funds your efforts raised or if they are to be paid a flat fee for their services.

There are also companies offering an “all or nothing” payment option. In that scenario, if your crowdfunding goal is met, you pay the crowdfunding host a percentage of monies raised, based on your contract. If the goal is not met, you don’t have to pay the stated percentage, but you also may not receive the monies that were raised. Instead, the money could simply remain in an investor’s account, waiting for the day you rejuvenate your fundraising efforts.

“Be sure to read your agreement carefully to know what you’re getting into,” cautions Estep.

A view from the trenches
Kevin Wilson is a publicist and writer in Washington, DC. He needs $700 for a trip to Atlanta to see his mentee play basketball, so he decided to try and raise the money by crowdfunding. He choose to use the platform at Crowdrise.com, partly because the site allows fund seekers to keep all the money they raised, regardless of whether their overall goal was met. Currently, he has raised $230.
He says crowdfunding is a viable option for nearly every pursuit. “It’s appropriate for any endeavor, based on the crowdfunding site you explore,” says Wilson.

According to Mayank Mishro, marketing manager at LawLytics, an Arizona-based legal marketing firm, crowdfunding involves more than simply the people seeking funding and those donating it. Lawyers, accountants and underwriters are just a few of the actors involved in the world of crowdfunding.
With so much at stake, how can a fund seeker determine which crowdfunding platform is right for their particular situation? A lot depends on the product or services that’s being touted, says Estep.

He suggests asking yourself, “’Will my product or service appeal to the masses or to a particular niche?’” The answer will impact which crowdfunding site is right for you.

“New products that are innovative, creative or appeal to a niche” are ripe for crowdfunding, he says.

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Tami Kamin Meyer is an Ohio attorney and writer. She may be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. or @girlwithapen.