Crowd-funding web sites are growing rapidly and have become one of the Essay

Crowd-funding web sites are growing rapidly and have become one of the newest ways of raising funds for various purposes - Essay Example Examples of these websites include: Kickstarter which finances creative projects, IndieGoGo which finances a wide range of ideas and new startups and rocket hub. Discussion The above three crowd-funding are elaborated here: Kickstarter: This is a financial site for inventive projects ranging from games, films as well as music  to art, technology and design. In this avenue each project creator is solely setting his project's financial support goal and deadline (Holden & Finlayson 2005).  If the project is liked by the people, they can guarantee money to facilitate it happen.  Given the project does well  in achievement its backing goal, every backer credit card is charged  on expiry of the time whereas if it fails to achieve its goal no one is charged thus funding in site is all-or-nothing. All items on Kickstarter have to be projected with clear goals and deliverables because it does not allow charity, cause or fund me projects. As (Huzel & Huang 1992) argues, Backers of th ese projects come from its fans and friends and also from blogs, Press, Facebook, Twitter, and Kickstarter itself. A sponsor of these projects obtains a close look at the creative process, and thus ensures that project comes to life. They can select from a range of distinctive rewards given by the project initiator which range from a copy of whatever is being produced e.g. a DVD, CD, book or a skill unique to that project. 100% ownership of the project remains with the creators. For successfully funded projects Kickstarter charges a 5% fee to the finances collected. Processing fees for US-based project done Amazon payments and those for non-US ones done through a third-party payment processor amount to 3-5% (Lawton & Marom 2013). Indiegogo: This  is a multinational  crowd-funding  website whose main aim is to help individuals raise money for their personal projects. It has the same layout as Kickstarter though one can start any project even charity donations (Maguire 2012). Th e flexible funding plan has been developed to help backers receive the money even if the project fails to reach its funding goal though a higher fee charges are levied for this. Its founders are: Danae Ringelmann, Slava Rubin, and Eric Schell in the year 2008. The web site's structure gives users an interface to do the following: create their own page for funding campaigns, set up a  PayPal account, draft "perks" for various levels of engagements and then publicize it in the social media like  Twitter, Facebook and other similar platforms. Indiegogo charges a levy of 4% for every fund raised, and a 3% fee for credit card processing, plus an extra $25 wire fee to non-U.S campaigns (Rauf 2014). In case members had applied for the Flexible Funding plan and the campaign fails to attain its goal, Indiegogo charges 9% of the fund, but all the same get to take the outstanding balance away. Unlike other similar websites e.g.  Kickstarter, Indiegogo releases the money immediately, when the donations are collected via the user's PayPal accounts (Neiss, Best & Cassady-Dorion 2013). Indiegogo also gives a straight credit card settlement acceptance via their portal. Those contributions are given up to the second week after the completion of a campaign.