For example, small businesses with little access to the stock markets and institutional private equity turn to these crowdfunding platforms to meet their capital needs. In response, several crowdfunding websites have ditched the need for contributors to be accredited investors before participating. Similarly, research shows that fundraising campaigns for personal and charitable causes are prominent on non-niche crowdfunding websites. On both global and local fundraising websites, for example, campaigns for medical expenses are more common than those fundraising for business capital.
Best crowdfunding sites
Whatever your reason for fundraising, you want to feature your campaign on the best crowdfunding website around. So, whether you want to support a personal, charitable, or business project, here are the best crowdfunding sites you should consider.
1. Kickstarter
Kickstarter is widely considered the best overall platform for a crowdfunding campaign to meet your capital needs. It does not support fundraising for any personal expense or charitable causes, with this specialization proving useful for people looking to raise capital to get your creative project off the ground. Every new project on Kickstarter is reviewed and vetted by an in-house trust and safety team before it can launch on the platform to receive contributions. While this slows down the process of reaching would-be donors, it protects contributors from fraudulent fundraising campaigns. It has also helped make Kickstarter a reputable avenue for crowdfunding and easier for startups and other projects to access third-party funding. Like most crowdfunding sites, Kickstarter collects a percentage of the money you’ve raised as fees for their services. At five percent of the total raised, Kickstarter is one of the costliest crowdfunding platforms around, although its stature and popularity make it a favorite for crowdfunding campaigns. Similarly, the platform’s default payment partner, Stripe, charges another three to five percent of every contribution made, while the platform demands that all project creators be located in the US, Canada, Australia, New Zealand, or a few select Asian and European countries to qualify.
Kickstarter Pros
Many easy-to-use tools Google Analytics integration Detailed campaign-tracking tools Rigorous vetting system Wide reach
Kickstarter Cons
Only allows fully funded projects to receive contributions Requires rewards for donors Tighter funding restrictions than competitors
2. Indiegogo
Indiegogo is a leading crowdfunding platform for creative, tech, and community projects looking to get third-party funding. The crowdfunding website previously operated an open model that allowed campaigners to define their project parameters while raising funding. This model was shut down late in 2021 in favor of more platform control to protect the community of Indiegogo backers from scammers. With Indiegogo, users are allowed to raise funds from individual backers for business and community projects. Such a fundraising campaign must fall in any one of the allowed categories, including tech and innovation, creative works, and or community projects. Each category has numerous specific subcategories allowed. By design, Indiegogo accepts more types of business ventures and projects on its platform. Campaigners can also choose between all-or-nothing funding and keep-it-all funding models in which campaigns that fall short of the target amount would return contributions to backers in the all-or-nothing model. Thanks to its all-or-nothing and keep-it-all funding models, Indiegogo allows campaigners the option to keep all their funds even when the campaign fails to reach the set financial goal, unlike Kickstarter’s all-or-nothing model.
Indiegogo Pros
Supports tech and creative projects Has varied funding models Supports ongoing crowdfunding campaigns No platform fee for charitable campaigns Good customer support Does not prescreen campaigns
Indiegogo Cons
Limited communication between campaigners and backers Backers don’t always get promised rewards Less site traffic than Kickstarter
3. Patreon
Patreon is by far the best crowdfunding platform for creators across the various creative fields around the world. It is a highly flexible crowdfunding service that has fewer project restrictions than most of its rivals, but with excellent capabilities for raising recurring, long-term funds from patrons who stick around for an enduring affiliation. Patreon crowdfunding activities target a particular audience, such as artists, designers, and other online personalities in the business of continuous content creation. This niched-down model allowed the crowdfunding platform to enjoy a meteoric rise in its public profile over the last half-decade, serving a class of people previously underserved by leading crowdfunding platforms. Further, the focus on creatives allowed Patreon to pitch its services to varied classes of users, with a patron having the choice of podcasters, video creators, writers and journalists, gaming creators, and musicians among others. Unlike Kickstarter and Indiegogo, Patreon employs a unique rewards-based crowdfunding model that lets backers, called patrons, subscribe to a creator’s content and make recurring payments on an ongoing basis in exchange for access to the content. Thus, Patreon is uniquely well-suited to creators of viral videos, online journalists, writers, musicians, and more, using their creative work as the commodity for which backing is sought.
Patreon Pros
Continuous crowdfunding for creators The platform facilitates reward giving Fewer content restrictions than some other crowdfunders Has multiple subscription plans
Patreon Cons
No built-in promotional tools Some creators report issues when attempting to collect funds A high volume of public complaints
4. Crowdfunder
Crowdfunder is one of the best crowdfunding platforms for Shopify stores and other small-scale online merchants at the seed stage. The website does not handle the typical investment functions involved in raising capital, such as processing the actual documentation or completing the transaction. Instead, Crowdfunder allows accredited investors to browse a wide range of requests for startup investments as well as invest in a broadly diversified fund. The Crowdfunder online fundraising platform has helped democratize access to capital, especially for startups and small businesses with limited access to institutional investors. The website applies diverse, dual equity or revenue-based financing model to dispatch funding for ambitious entrepreneurs, availing more funding options than previously allowed. In fact, the Crowdfunder website boasts one of the easiest starting processes for those looking to raise funding. A new user is required to register on the platform and make a free fundraising profile according to established rules. Afterward, you can then build a fundraising campaign to meet every qualified investor interested in your project, who can then fund your business in form of equity or revenue-based financing.
Crowdfunder Pros
Wide selection of companies raising Invest alongside name-brand VCs Detailed and digestible investor presentations Excellent investor and entrepreneur education content Offers broadly diversified VC fund
Crowdfunder Cons
Only open to accredited investors No direct due diligence on companies raising Startups are high-risk, low liquidity investments Actual transactions happen off the website
5. GoFundMe
GoFundMe is the largest crowdfunding platform in the world, with about 50 million people contributing more than $5 billion on the site in 2017, the last fiscal year for which fundraising totals are available. The website is best used for soliciting contributions to cater to personal and small-project needs. Indeed, the website was specifically launched to address the Kickstarter and Indiegogo blindspot toward non-business crowdfunding for personal and charity causes. Unlike other crowdfunding websites, GoFundMe has been accused of redirecting contributions to other causes the platform deems “more worthwhile”. The website has also been faulted for being slow, messy, and outright refusing to process refunds whenever requested. Further, the majority of GoFundMe campaigns do not attract sufficient financial backing to reach the stated campaign target. The Atlantic found that only campaigns that make the news and go viral become spectacularly fruitful as the rest fizzle out without coming close to their financial goals. While this can be attributed to the sheer number of campaigns on GoFundMe, the website is also more politicized that Kickstarter and its other peers. The success or failure of campaigns is variously determined by the political and social divisions and/or connections of its backers, as well as one’s inclination on key divisive topics. Thus, the lack of clear metrics to underscore campaign performance makes GoFundMe a poor choice for business fundraising.
GoFundMe Pros
Supports personal and charity fundraising Accepts non-accredited investors
GoFundMe Cons
Does not offer much support for fundraisers Poor refunds processing policy Lower campaign success rates
6. Fundable
Fundable is an exceptional crowdfunding website for individuals and small businesses looking to raise capital for their ongoing activities. The platform is free to get started on by simply creating a profile, but the $179 monthly fee charged throughout the fundraising campaign can be punishing for unsuccessful campaigns. Per dollar value, however, the Fundable monthly fee membership is significantly low compared to similar crowdfunding platforms. Indeed, while the percentage fees on Kickstarter do not burden unsuccessful campaigns, they consume a significant chunk of the amount raised. The Fundable platform touts itself as a business-centric crowdfunding platform with hands-on support to all companies as they navigate the fundraising process. The website gives businesses the choice of launching a rewards-based crowdfunding campaign similar to Kickstarter, or an equity-based campaign like WeFunder. Setting up a Fundable fundraising campaign for your business is quick, easy, and free. The choice between rewards or equity campaigns allows users to tailor their fundraising experience according to the specific needs of the business. Campaigners also have time period flexibility, allowing investors to work with the company for as long as necessary to meet their now-aligned goals. With equity campaigns, for example, Fundable allows investors to commit to recurring investments renewable after every 90 days.
Fundable Pros
Both rewards and equity crowdfunding are available Low fees for successful campaigns Good customer support Prescreening of campaigns benefits backers
Fundable Cons
The website charges a flat monthly fee No funds if you don’t reach the funding goal Campaigns must be prescreened for approval
7. Crowdcube
Crowdcube is the leading crowdfunding platform for the UK and European companies looking to fundraise in the secondary equity markets. The website has made investing in fledging private start-up companies easier for non-accredited investors while startups access oft-cheaper capital in return. Crowdcube is a good secondary market for investment opportunities and raising external capital. The website allows you to invest in the most promising private companies safely as campaigners are pre-vetted, provide ample information, and must abide by platform regulations. Crowdcube essentially bridges a funding gap between investors with limited access to investment opportunities and private companies looking to fundraise. The platform’s claim to fame is how it makes early-stage investing open to the average person, with investors allowed to get started investing for as little as £10. This is a far cry from SeedInvest, for example, which requires a minimum investment of $500. Crowdcube crowdfunding has a pretty simple model. To get started, a user must make a Crowdcube account to gain access to the campaign marketplace and browse the available fundraising initiatives. The investor then looks for neat projects that match their interests and commits their money to the chosen campaign.
Crowdcube Pros
Choice of equity and rewards funding model Tax benefits for investors Greater popularity than similar websites Better support for small businesses
Crowdcube Cons
No guaranteed investment returns High valuations of pitching companies Charges investors a fee at investment Fundraising companies have illiquid stocks
8. Seedinvest
SeedInvest is a leading equity crowdfunding platform best suited for ambitious high-growth startups. The crowdfunding website accepts business fundraising only, with tech and consumer-facing businesses the most popular. SeedInvest provides a useful platform for startups looking to raise funds online by matching accredited investors with thoroughly vetted startups looking to raise investment capital. Investors can use the website to fund qualifying startups manually or through an auto-invest option that bundles up to 25 startups together so investors can fund multiple startups at once. Raising funding on SeedInvest also allows startup founders to receive funding assistance. The investment platform charges a transaction commission fee of 2% of the total investment amount, which is capped at a maximum of $300 per investment transaction. For the investor, the minimum allowed amount is $500, but every investor can set their own minimum check value to as high as $10,000. While SeedInvest accepts anyone with the resources to invest in vetted startups, some of the opportunities are only available to accredited, high-net-worth investors. Being a decidedly exclusive fundraising platform, any startup accepted onto the SeedInvest website is more likely to raise and reach set funding objectives than those on similar websites. Further, companies allowed to conduct campaigns on their platform are often legitimate, offering better investor protection than Indiegogo or Kickstarter.
SeedInvest Pros
Good for startups with exponential growth potential Connects you to accredited investors Allows non-accredited investors to invest
SeedInvest Cons
Complex fees model Expensive to fundraisers Stringent entry requirements
© 2022 Rahul Pandey
