Crowdfunding for Projects

The first thing you should do is figure out whether or not crowdfunding is the most appropriate form of financing for you and your project. After that, you should find out which of the crowdfunding platforms is best suited to your needs. It's a good idea to read the guidelines on the platforms themselves and maybe even talk to the operators in person. If the platform approves your crowdfunding campaign and takes on your project, then you're set to go. You'll be able to find the concrete Terms & Conditions (AGB) on each respective crowdfunding platform. Don’t forget, it's possible that a platform might reject your proposed campaign after a pre-interview or pre-check.

Most platforms charge a commission fee if you actually succeed in financing your project in the target amount – this fee usually runs between five and 15 percent. Most platforms also highly recommended that you prepare an effective and attractive video or some sort of image series when you start your campaign so that potential supporters can get a better idea of your plan and so that it can proceed successfully. And don't forget that you have to carry the costs of preparing these videos/images.

You can start a campaign alone or with other individuals. In each case, however, there has to be one specific contact partner and one principle person responsible for the project.

In general, all EU citizens with a bank account within the EU can carry out a project in Germany if the project operates under German law and has a German legal form ("Rechstform"). Please consult each platform's own guidelines to find out about their individual provisions.

Portals usually charge a commission fee that varies from platform to platform – the percentage ranges from four to 15 percent of the targeted amount. Please note: in general, the amount only has to be paid if the crowdfunding campaign is successful. Please ask the specific platform. 

The minimum amount of funding varies from platform to platform. It's handled in the same way as the time period in which the project must be financed. For example, the minimum funding amount at Startnext is €100, at PledgeMusic it's €1,000, VisionBakery have no minimum funding amount. Indiegogo allows you to set a "flexible time contract" for your campaign (plus you can keep the amount of funding you actually receive even if you don't reach your funding goal: in this case, however, the commission fee also increases). We highly recommend that you visit the websites directly to check out exactly what kind of minimum amounts they require, if any. Plus you should always consult with the operators of the portals to find out exact details.

Not really. A project can be "over-financed" but it should not be "underfinanced.

The answer to this question differs from platform to platform. You should always get as much information as possible in advance about concrete conditions from the different platforms themselves. 

On most platforms this is possible only in exceptional cases and only after prior consultation with the portal operators. Please ask the serveral platforms. 

In general, the rule is that if your crowdfunding campaign doesn't succeed in acquiring the targeted amount, the individual amounts provided by existing supporters will be transferred back to them by the respective platform. The issue as to whether or not interest is paid, how much interest is paid or if there are any back-transfer fees is handled differently by each platform.

This is something you would have to discuss with your chosen platform. In general, crowdfunding portals don't really like to do this, and most of them don't recommend it at all. Instead, you should probably ask yourself the following question: Why was my funding round not successful? You should always talk directly to your crowdfunding portal about the possibility of a repeat crowdfunding drive. Many portals recommend a second round of crowdfunding only in the case of a follow-up project.

Again, this would need to be discussed directly with the platform; however, in general, it's also not recommended. In most cases, the majority of portals recommend a second round of crowdfunding only in the case of a follow-up project. It is possible, however: for example, the "Bud Spencer" project had campaigns on different platforms.

It's not always prohibited, but it usually doesn't add any value. On the contrary, it often confuses the crowd and doesn't always achieve the goal you wanted. On platforms such as PledgeMusic, their Terms & Conditions (AGB) prohibit this activity explicitly. But you should always inquire directly at the portals you're working with.

All individuals who have reached the age of 18 and are geschäftsfähig, i.e. "legally competent."

It depends on the platform. It's possible to provide your own equity capital on Startnext, but your own share cannot be greater than 50 percent. On VisionBakery, too, it's only possible if you also publish your name and the amount. It's totally accepted and easy to do on PledgeMusic. Again, it's important to always consult the information provided on each respective platform.

Everyone who starts a project is required to pay VAT ("Umsatzsteuer"). The amount of tax you pay depends on your tax situation, i.e. whether you're a small businessperson ("Kleinunternehmer"), a non-profit organization ("gemeinnütziger Verein") or a company ("Unternehmen"), etc. The best thing would be to speak to a tax advisor in advance about your crowdfunding project.

The answer to this question differs from platform to platform. For example, Startnext permits donations if the entity behind the project is a non-profit organization, a foundation or another association officially permitted to accept donations. But VisionBakery do not provide the opportunity for donations. VisionBakery does, however, include a section titled "social projects," which Startnext does not have. Again, it's best to talk to the platform operators directly about the modalities and opportunities. Even better in this case would be to consult your tax advisor.

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