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Crowdfunding boosts businesses in slow economy

Tuesday - 5/1/2012, 6:42pm  ET

Anna-Lysa Gayle, Special to wtop.com

WASHINGTON - The recession has forced many to start thinking creatively not just about how they spend their money, but also how they fund their small businesses. One of the many ways some people are doing this is through crowdfunding.

The term refers to the act of pooling money from various individuals who believe in a specific creative project or idea ranging from performing arts to technological advancements. It is mostly done online through social media platforms and combines interactive marketing and innovative ideas.

Think of it as 21st century fundraising. A whole new way to think about gathering resources for individual's projects. Websites such as IndieGogo, Startup Addict, Peer Backers and Kickstarter are just a few popular crowdfunding websites. Many sites offer rewards to anyone who pledges funds towards a project.

The success of social media platforms such as Facebook, Twitter and Instagram has inspired many to launch similar tools. Take for example a few of the following projects that are getting lots of attention:

  • Snapstagram will allow people to print Instagram photos by searching hashtags. Check out this project's page on Kickstarter to see how much they are fundraising each day.

  • Check out Meika May's project posted to IndieGoGo.com. Her project is all about using her mobile boutique to save the planet by revamping a1961 Ford Bus into a store filled with green merchandise.

  • "Twitch: The Documentary" is about an 18-year-old girl who tries to find out whether she suffers from Huntington Disease. Money raised will be used to fund her genetic testing, five days of filming, a producer, director, camera operators and an audio technician.

With the increasing popularity of crowdfunding, organizations like the National Crowdfunding Association champion creating a system for establishing a criteria for accredited websites.

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(Copyright 2012 by WTOP. All Rights Reserved.)