Raising funding or capital for your startup business can be a major hurdle to bringing your idea to life. While bank loans and approaching investors are still viable options for raising funds, crowdfunding gives you the opportunity to tap into the support of the crowd: groups of people who collectively invest in your idea to make it a reality. According to a recent report from Fundly, crowdfunding sites have enabled entrepreneurs around the world to raise funds to pakistan b2b leads
grow their businesses and causes, generating $65 billion in revenue for the global economy in 2020. What’s more, crowdfunding can also give entrepreneurs the opportunity to validate demand for their ideas before they go into production by allowing others to buy in through pre-orders, donations, and investments. Below, we’ll take a look at 10 crowdfunding sites worth exploring to raise money for your business.
Contents hide
1 What is crowdfunding?
1.1 How does crowdfunding work?
2 Kickstarter is the best crowdfunding platform overall
3 Indiegogo is the second best crowdfunding platform overall
4 Patreon is the best crowdfunding platform for creators
5 Crowdfunder – The Best Crowdfunding App for Shopify Stores
6 GoFundMe – The Best Crowdfunding Site for Raising Personal Funds
7 Fundable – The Best Crowdfunding Platform for Small Businesses
8 Crowdcube - The best crowdfunding site in the UK and Europe
9 Mightycause - The Best Crowdfunding Site for Nonprofits
10 SeedInvest - The Best Crowdfunding Platform for Seed-Stage Companies
11 StartEngine - The Best Crowdfunding Platform for Fast-Growing Startups
12 Raise Money for Your Business Today
13 FAQ on crowdfunding sites
13.1 Related publications:
What is crowdfunding?
Crowdfunding is a business funding strategy that involves raising small amounts of money from a large number of people. Contrast this with traditional fundraising, which involves raising large amounts of money from accredited investors or venture capital firms, one source at a time.
How does crowdfunding work?
Crowdfunding “backers,” as they are often called, can receive a number of incentives in exchange for their support, including:
Opportunity to become an early adopter of an innovative product
Possibility to pre-order the product and participate in its development
Exclusive rewards such as early bird discounts or free swag at launch.
Personal access to the founding team or the ability to support people they know personally
An equity stake in a high-potential early or growth stage company , although this is less common for consumer-facing brands
In exchange for hosting your project, crowdfunding sites charge a fee to use the platform (either a monthly rate or a percentage of the funds raised), a transaction fee, a payment processing fee, or some combination. While each crowdfunding site has its own unique features, overall fee structure, and user base, the basic concept is the same: you submit your project to the platform with a fundraising goal and deadline, then campaign for support online, often through social media . So what are your options for raising money for your business using crowdfunding platforms? Let’s take a look at some of the best crowdfunding sites (and Kickstarter alternatives) today, covering a variety of use cases you can use to raise money for your next campaign.
Kickstarter is the best crowdfunding platform overall
Fees: 5% platform fee if you reach your goal, plus 3% to 5% (US) payment transaction fee.
As the most popular crowdfunding platform where creative projects can find support, Kickstarter is almost synonymous with crowdfunding. Since its launch in 2009, the Kickstarter community has helped more than 200,000 projects raise funds — including physical goods, movies, games, and more — worth $5.9 billion. Kickstarter is a rewards-based crowdfunding platform. Backers are offered incentives for supporting a project, including t-shirts, shout-outs, or exclusive pre-order discounts. You can also offer different reward tiers. The more money a backer contributes, the better the rewards they receive.
Kickstarter campaigns are all-or-nothing, meaning you only get access to your funds (and pay Kickstarter’s platform fees) if you reach your initial fundraising goal. If you don’t reach your goal, all of your money stays with your backers. As a result, Kickstarter projects tend to be high-quality and new — often creative and innovative enough to attract early adopters and grab headlines . Backers also tend to view them as more sustainable projects, since they’re not actually parting with their money until the campaign is successful. You can learn more about running a successful Kickstarter campaign in our interviews with sellers at Spotify, Rockwell Razors, SaniKind, and LastObject.
Indiegogo is the second best crowdfunding platform overall
Fees: 5% platform fee if the goal is reached (not including payment processing fee).
]
Indiegogo is a robust crowdfunding platform that supports businesses , artists, and nonprofits . While it may seem similar to Kickstarter at first glance, it has its own set of easy-to-use tools and campaign options. The most notable difference is the ability to choose a fixed funding goal (all or nothing, like Kickstarter) or a flexible funding goal for your campaign. With a flexible funding goal, you get funds regardless of whether you reach your goal by the deadline. The flexible funding option is especially useful when you can fulfill your promise to backers even if you don’t raise enough funds, such as if you’re launching a new product line for an existing business. Additionally, Indiegogo InDemand allows you to continue raising funds even after your crowdfunding campaign has ended, while you’re in the production phase or preparing to fulfill orders. InDemand is available to you whether you’re running a campaign on Indiegogo or another crowdfunding platform. Shopify store BodyBoss actually moved to Indiegogo InDemand immediately after its Kickstarter success.
Patreon is the best crowdfunding platform for creators
Commissions: From 5%
