Joel Brummel and Jim Downey have a fresh new business idea that is so fresh and new that funders aren’t entirely sure what to make of it.

Their company, Show Me Green Coal Management, wants to take wood, hay and other biomass and, through a process called torrefaction, turn it into environmentally friendly pellets that power plants can burn for fuel. It’s popular in Europe but practically unknown in the Midwest.

“It’s hard to get funding for something like this because, at this point in time, we’re just getting started,” Downey said.

And that’s why Brummel and Downey have decided to jump into the world of crowdfunding.

In mid-April, the startup launched a three-month crowdfunding campaign through Indiegogo, a website that lets artists, nonprofits and, yes, entrepreneurs solicit money for their projects from large numbers of small donors. Downey and Brummel are trying to raise $15,000 for legal and administrative expenses.

New Options for Raising Money

According to a Crowdsourcing.org report, nearly $1.5 billion was raised through crowdfunding campaigns around the world in 2011. While Indiegogo and Kickstarter are the best-known sites, there are dozens of crowdfunding platforms, each serving a different niche. Neighbor.ly, a Kansas City-based startup, for example, lets donors put money toward parks, public transit and other civic projects.

But, like torrefaction, crowdfunding for small businesses is an idea that is still in its infancy in the United States. Last year, the president signed the JOBS Act, legislation that will open the door for entrepreneurs to sell equity in their startups through crowdfunding. But the Securities and Exchange Commission, which wants to make sure investors are protected, hasn’t written the exact rules regulating the process yet.

On the advice of its lawyer, Show Me Green Coal Management isn’t selling equity. Instead, the startup is asking for donations.

Giving Them a Reason to Give

Like most crowdfunded projects, Downey and Brummel are offering incentives to people who give them money, including a T-shirt with the company logo and a subscription to the company newsletter.

Before donors open their virtual checkbooks, though, they want to know the goals and story behind the projects they’re backing. To connect with the Indiegogo audience, the Show Me Green Coal Management team put a lot of effort into a professionally produced video and text that appears on the startup’s Indiegogo page. Brummel and Downey also feel the company’s environmental focus could help them win over potential donors.

“We’re a very green organization, so we have somewhat of an appeal to people who would like to encourage us,” Brummel said.

Crowdfunding might not be the perfect solution for every young company, but Downey and Brummel see a lot of potential.

“It is, we believe, an excellent stepping-stone to get from here to there,” Brummel said. Show Me Green Coal Management’s Indiegogo page can be found at www.indiegogo.com/projects/green-coal-now-is-the-time.