1. KickStarter, 2. GoFundMe, 3. Indiegogo, 4. Patreon, XX, 5. Wefunder, 6. GoGetFunding (^Best), 7. Ulule, 8. SeedInvest (^2nd)
For years, small business owners often turned to traditional sources when it was time to raise money for their startups. From Accredited investors and Angel investors to business Loans and Venture capitalists, access to funding felt like it was limited to these more formal options.
But today? Crowd-Funding is a far more mainstream financing choice. Thousands of entrepreneurs are turning to Crowd-Funding sites to finance their small businesses, and the U.S. saw $17.2 billion in Crowd-Funding revenue in 2020 alone.
Despite its growing popularity, Crowd-Funding can be intimidating for small business owners—particularly when it comes to finding the best Crowd-Funding site for their own fundraising campaigns.
Below are eight online fundraising sites that are worth checking out.
When you think of Crowd-Funding websites, Kickstarter is likely the first to come to mind. Founded in 2009, the platform is unique in that it rewards people for donating. Those who support a project (often called funders or backers) receive perks—from a product to a unique experience—depending on their level of investment.
Who it’s good for: The vast majority of projects on Kickstarter are creative in nature. It’s also worth noting that, given Kickstarter’s unique approach, you need to have a specific project for people to donate to that leads to a final deliverable. That means this isn’t the site to turn to if you have a less tangible goal, such as getting a service business off the ground.
What it costs: Here’s another important caveat with Kickstarter: If you don’t raise 100% of your funding goal, you get none of the cash and donations are returned to donors. If you meet your goal? Kickstarter has a 5% fee, and the payment processor will charge an additional fee. Payment processing fees are 3% plus 20¢ for each pledge over $10, or 5% plus 5¢ for each pledge under $10. If your funding initiative isn’t successful, you won’t pay any Kickstarter fees.
GoFundMe is another big name among the best Crowd-Funding sites. While plenty of businesses use the platform, it tends to skew mostly toward individual people aiming to raise funds for something in particular. This could be anything from covering medical bills to paying for education or supporting a cause. (Specialists)
Who it’s good for: GoFundMe touts the fact that it’s for “personal causes.” which means there are a lot of individuals on the platform. That makes it ideal for Entrepreneurs looking for money to open a new venture, support their company through a downturn, or even take their existing business to the next level.
What it costs: GoFundMe is another platform where you must meet your fundraising goal in order to collect. How much does GoFundMe take? For campaigns started in U.S. dollars, there is no platform fee (it’s 5% in select other countries). You’ll also pay 2.9% per transaction, plus an additional 30¢ per donation. That includes any debit or credit card charges.
Indiegogo isn’t quite as niche as the other platforms – meaning you’ll find a solid mix of causes, businesses, and individuals on the site. Additionally, IndieGogo stands out from other Crowd-Funding sites, as it offers two different types of Crowd-Funding: flexible funding or fixed funding. Flexible funding doesn’t require you to meet your fundraising goal to collect. However, you will pay a higher fee – if you don’t reach your target. You can also opt for fixed funding, where you’ll only get the money if you hit your fundraising goal.
Who it’s good for: Just about every industry is covered on the platform, making it a good fit for almost anybody.
What it costs: Indiegogo’s fees are broken into three different categories:
- Platform fee: 5% of all funds raised for your Crowd-Funding campaign. These are calculated and deducted from the funds you actually raise, rather than your funding goal.
- Transaction fee: Varies based on country, but is usually around 2.9% plus 30¢ of every transaction.
- Transfer fee: These might occur when IndieGogo transfers money to your bank account. The price depends on your country—for example, it’s $0 in USA – if you have a U.S. bank account.
4. Patreon XXX
Moving away from passion projects, Wefunder is designed specifically for startups and small businesses in all sorts of industries—from health care to beer brewing. The platform is meant to give Angel investors an outlet to support businesses, as well as Founders access to the money needed to start their companies. It uses an equity Crowd-Funding model, meaning people are investing in companies in exchange for securities, as opposed to donating with no expectation of return.
Who it’s good for: WeFunder prides itself on being built for any type of founder and small business, whether you run a coffee shop or a movie studio – product or service industry.
What it costs: If you reach your fund-raising goal, you’ll pay 7.5% of your total fund-raise. Wefunder states that there are no other devious payment processing charges or monthly fees, and they’ll match a better price if you find one.
6. GoGetFunding ^
GoGetFunding may be a site you’ve heard less about despite the fact that it’s been around since 2011. But it’s another great option, particularly for those who are looking for some flexibility in terms of the projects they can fundraise for. Additionally, GoGetFunding allows fundraisers to keep the money raised whether they meet their target or not. ^^^ Best !!!
Who it’s good for: GoGetFunding empowers users to raise funds for any cause—whether it’s business related, personal, or for a non-profit.
What it costs: GoGetFunding charges a fee of 6.9%, which sounds high when compared with the others. However, it’s worth noting that this fee includes both the 4% platform fee and the 2.9% payment processing fee. This makes it a bit more cost-effective than most of the other options out there.
7. Ulule Euro Crowd-Funding
8. SeedInvest ^
The largest U.S. equity Crowd-Funding platform, SeedInvest helps startups and small business owners across all types of industries raise funds from over half a million investors. They’ve helped businesses raise over $300 million online and are aimed primarily at early-stage and high-growth companies. ^ 2nd Best ^
Who it’s good for: SeedInvest has a more thorough process that requires businesses to apply to be listed on the site and go through due diligence. This makes it a suitable choice for companies that have their feet under them and plan for major growth. You’ll need to share some basic information about your business and fundraising goals, as well as include your pitch deck if you have one. You should hear back about your application within two to three business days.
What it costs: SeedInvest is another platform that only collects for successful campaigns. In that case, you’ll pay a placement fee of 7.5% of what you raise on SeedInvest and an equity fee of 5% of what you raise.
Get the $$$ your new business needs
When it comes to raising money to establish or grow your business, you have more options than pursuing traditional venture capital. There are plenty of platforms that will help you crowdfund support and raise money online for your startup.
The best way to get started is to consider your own needs and goals. With those in place, you can begin to zero in on which fund-raising platform will work best for you. Then, you can launch your campaign and keep your business moving in the right direction—without turning your own pockets inside out.
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