Crowdfunding Best Practices

Rewards-Based Crowdfunding for Small Businesses: What You Need to Know

Have you considered crowdfunding for your small business? In this post, we discuss rewards-based crowdfunding and how it can benefit your business.
Rewards-Based Crowdfunding for Small Businesses: What You Need to Know

By Jules


November 15, 2018

Let's say you have a great idea for your small business that requires additional funding. Traditionally, you can get funds from a financial institution, or if you're lucky enough, friends and family.

However, there could be another option for you – crowdfunding. Recently, crowdfunding for small business has become a trend worth considering if you're interested in alternative financing.

One perk about crowdfunding is that it acts just like a grant and as such, you don’t need to worry about repayment of funds or soaring interest rates.

The different types of crowdfunding

Before you consider crowdfunding for your business, keep in mind this option comes in various forms. This includes:

  • Rewards-based
  • Equity-based
  • Lend-based
  • Donation-based

For the purpose of this article, we will be focusing on rewards-based crowdfunding.

What is rewards-based crowdfunding?

With this type of crowdfunding, donors are rewarded with services or products that are related to the crowdfunding project. The value of such service or product is mostly determined by the amount donated.

Rewards can range from a simple, handwritten thank-you card or unique, branded items to early access to the company’s service or product. It's a great option for small business owners who are looking for interest-free business funding options that can kickstart a new part of their business.

How small businesses can benefit from crowdfunding

There are several ways in which small business owners can benefit from crowdfunding. This includes but not limited to the following:

  • Business owners are able to utilize the power of the Internet as they are can raise significant amount from backers (campaign supporters) around the world for their small businesses.
  • It's an inexpensive and potentially less-stressful means of effectively bankrolling a good business idea.
  • It gives business owners the opportunity to promote their services and products on social media and in turn, build a huge base of interested customers.
  • With this online fundraising option, there are no repayments or interest needed with crowdfunding and as such, the business owner can concentrate on growing their business instead of stressing out about loan repayments.

How it works

In order for a crowdfunding campaign to be successful, there are certain steps that need to be taken before, during, and after the launch. Some of these steps include but are not limited to the following:

Choose a crowdfunding platform

In order to launch your campaign, you need to find a platform that can host it. Kickstarter, which since its inception in 2008 has remained the most popular platform for rewards-based crowdfunding, has collectively raised over $3.5 billion for all their projects combined. Kickstarter is best for video games, films, comic, stage shows, tech gadgets, or book projects.

Another option is Indiegogo, also founded in 2008 for the sole aim of projecting new businesses that need investment. From health/fitness to tech gadgets, film, comics, music, outdoor pursuits, and others, there are lots of creative projects you can crowdfund on Indiegogo.

For a more in-depth comparison of these two platforms, check out our Kickstarter vs Indiegogo post.


After you have chosen the platform on which you want to source for funds for your business, there are certain prelaunch steps you need to take. This includes but not limited to the following:

  • Carrying out feasibility studies
  • Create great marketing plan
  • Setting up an email service to keep backers updated about your campaign
  • Drafting email templates
  • Preparing your social media messages
  • Designing graphics for the products or services
  • Build landing pages
  • Creating social media pages
  • Creating social media ads to help spread the word of your campaign
  • Getting the ads optimized

During the campaign

Once you launch your campaign, there are certain steps you should take to ensure things go smoothly. This includes:

  • Weekly updates on social media
  • Periodic updates via email
  • Addition of limited-time rewards that can help attract new supporters and further motivate existing supporters


You've reached your funding goal - success! With your campaign done and dusted, it's now time to follow through with your promise to reward those backers who contributed certain amounts to your campaign.

If you have plans to deliver physical rewards (such as branded items or other goodies) you should ensure that you have your fulfillment andshipping logistics fully figured out.

While you might be able to depend on employees or friends and family to help pack and address these shipments, you can consider hiring a 3PL(third-party logistics provider) to take care of this step for you. While it will cost you extra money, if you have hundreds of orders to fulfill, you can take out a lot of stress if you trust professionals to pack your items and connect you with affordable shipping rates for you.

And, not to scare you or anything, but issues may arise after shipping your crowdfunding campaign! Here's our advice on how to solve the most common crowdfunding shipping problems.


Crowdfunding is a viable alternative worth looking into if you need additional, "no strings attached" financing for your small business.

If you plan on participating in rewards-based crowdfunding, be sure to have a plan in place to ship backers their rewards safely and on time - whether that means finding some dedicated employees and volunteers, or hiring a 3PL to help out.

At Easyship, we help fulfill many successful crowdfunding campaigns. Feel free to contact our logistics experts if you're interested in being connected to over 20+ warehouses worldwide in addition to 250+ courier solutions, all with discounted rates!