Crowdfunding is a way to fund a project by raising money in small amounts from a large number of people, usually online.

The amount of planning you do before you begin the process of crowdfunding will help determine how successful your campaign will be. 

Before you begin, it’s important to note that there are laws around raising equity, administered by the Australian Securities and Investment Commission (ASIC). You will also need to consider any tax implications. There are serious consequences for breaching the law, so you should seek advice from professionals, such as an accountant and lawyer.

Do you know who much money you will need to fund your project? Will you accept the funds as a donation or will you offer something, products, services or equity, in return? Many crowdfunding projects offer something to their supporters. Make sure to budget for any products or services offered in return for money received.

If you are in business, what you give in return for the money received will determine whether there are any tax considerations. If you treat the money received as a donation to your business then there could be GST and income tax issues, as it is likely that the money will be revenue. The cost of providing any goods or services as rewards should be a tax deduction. Individual donations to your business will generally not be tax deductible to the person making the donation. 

It is important that you seek GST and income tax advice from your accountant or adviser before you start to raise funds for the project, so that any cash flow implications can be built into your project budget. 
Offering equity in return for crowdfunding is also complicated, particularly because of the potentially high numbers of people involved. Effectively you are selling part of your business to those who contribute funds. You should speak to a professional about the implications of your business structure, drawing up a shareholder agreement, valuing the percentage ownership of each investor and distributing future profits. 

Once you have decided to go ahead with crowdfunding you will also need a marketing plan to help your campaign get noticed online. There are many different crowdfunding websites to use, such as OzCrowd or Pozible, so some research will be required. Strong social media networks will be of great importance here.