Platforms like Indiegogo and Kickstarter allow lots of strangers to invest small sums. With five-figure campaigns becoming more and more common, this funding method is growing in popularity among those looking to raise seed capital. Of course, no one wants something for nothing, and founders must choose whether to sell equity or reward backers with perks such as discounted products or early delivery.
Campaigns only get funded if they meet their pledge goal. There is a high failure rate but, for those that are successful, there are additional benefits to running a campaign, which can be used to market a product, increase pre-sales, and test pricing.