A brilliant business idea has dawned on you, but you do not have a single clue how to find the necessary funds to bring it to life.
Besides bank loans and raising money from traditional investors, there is an increasingly popular option that gives you the opportunity to secure support from a group of individuals who will collectively invest in your idea: crowdfunding.
How crowdfunding works?
Traditional fundraising relies on raising a large sum of money from one source at a time. Crowdfunding, on the other hand, focuses on raising smaller amounts of money from a larger group of individuals.
While every crowdfunding platform has its own features and fee structure, the core concept is the same – you submit your project to the platform with a fundraising goal and a deadline, and then campaign for getting support online, often through social media. By using social media to spread awareness, you can reach more potential donors than traditional forms of fundraising.
So, if you have decided to go for it, here’s some of the best crowdfunding sites to raise funds for your campaign.
Indiegogo was founded in 2008 and is available in 235 countries and territories.Today, more than 10 million people visit the site on a monthly basis where about 19,000 campaigns are launched every month. Here you can create a crowdfunding campaign for any idea or product.
To get started collecting funding, you can set up a campaign for up to 60 days. You will be charged with a 5% platform fee plus a 3% to 5% third-party processing fee.
Their tools allow you to integrate with other platforms, including Facebook and Google, to promote your campaign. Once you are done raising money, you’ll receive it via your bank within 15 business days.
Kickstarter helps artists, musicians, filmmakers, designers, and other creators connect with the resources to bring their ideas into life. Since its launch in 2009, the company has helped 15 million people pledge $3.7 billion to successfully fund more than 143,000 projects.
With Kickstarter, you pay only if you achieve the goal of raising money. This means that it’s free to create a project, but if it’s successfully funded, Kickstarter applies a 5% fee to collected funds. There will also be processing fees between 3-5%.
The platform has been operating since 2011, and it is still an excellent choice, especially for those who are looking for some flexibility in the projects for which they raise money. In addition, unlike other platforms, the page allows you to keep the money collected for projects – whether or not they meet their target.
GoGetFunding charges a 6.9% fee, which sounds high compared to other platforms, but it is worth noting that this charge includes both the platform fee and the payment processing fee – making this a little more cost-effective than other options.
GoFundMe was launched in 2010 and has become one of the largest fundraising platforms online, having raised more than $9 billion from over 120 million donations. Its success and simplicity help make it the best platform for individuals.
The site has several thousand registered users, and it is ideal for business owners and entrepreneurs looking for funds to open a new business or even upgrade their existing businesses to the next level.
A benefit of GoFundMe, compared to other platforms that charge platform fees plus processing fees, is that it has a 0% platform fee. The company does have a processing fee, which is 1.9% and $0.30 per transaction. You can raise money for as long as you want – there are no time limits or deadlines.
Patreon was founded in 2013. It is a crowdfunding platform designed specifically to help creative people thrive by helping them raise funds from friends, family, supporters, and admirers.
It’s free to get started with Patreon, however, there is a monthly fee depending on which of the three available plans you choose. The “Lite” plan charges a 5% fee from the money generated on Patron, the “Pro” level takes an 8% cut, and the “Premium” plan takes 12%. Plus, the company charges a processing fee of 2.9% and $0.30 per payment. You can switch between the Lite and Pro plans at any time, while the Premium plan requires a minimum of a three-month commitment.
Crowdfunder is a community of 200,000 entrepreneurs and investors offering equity crowdfunding – which allows entrepreneurs to sell shares in their company to accredited investors. Their network of 12,000 VCs and angel investors has helped startups of all kinds raise money (Over $150 million) from Pre-Seed to Series A.
Crowdfunder offers Free, Starter ($299/month), and Premium ($499/month) plans – each with a variety of services, from document storage to personalized support.