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This post is part of our Field Guide to DTC eCommerce Capital. Click the links below to read more chapters from the guide.
Another option that is becoming increasingly popular and accessible is crowdfunding. Some DTC brands who have successfully crowdfunded at least part of their growth include Dame and Pepper. You’re probably familiar with platforms like Kickstarter, Indiegogo, and Patreon, which serve various niches. There is also iFundWomen, which provides startup funding exclusively for (you guessed it) women.
Additionally, average people can now invest in startups via platforms like Wefunder, SeedInvest, StartEngine, Republic, and AngelList. Many of these have low minimums to invest (think $100-500), certainly as compared with angel networks and venture capital funds.
- Can serve as an early marketing vehicle and build your initial customer base
- Quick close and straightforward terms, generally speaking.
- Not a lot of financial risk for you up-front.
- If your business does not meet its funding goal, it can hurt your reputation and ability to source other types of funding.
- A lot of up-front work to market and sell your idea.
- Generally limited capital.