Without the experience and proof of success, it’s often difficult to get the capital you need. Today, many young business owners are turning to crowdfunding to get on their feet.
Crowdfunding makes it easier than ever for your friends, family and even strangers to back your business. This list helps you quickly evaluate the leaders in the market to find the one that could work best for your needs.
You’ve no doubt heard of this Brooklyn-based platform — in some circles, “Kickstarter” is to crowdfunding what “Kleenex” is to tissue.
Kickstarter is designed to fund creative projects. But don’t worry if don’t claim “artist” or “musician” on your tax forms. Remember that guy who accidentally raised more than $50,000 to make a potato salad? That was on Kickstarter.
It’s an all-or-nothing platform — which means if you don’t reach your fundraising goal, you won’t get any of the money you raised. It also means that your backers won’t have to pay for your project, which could make donating more attractive.
How Kickstarter works
With Kickstarter, you raise donations toward a specific goal and specific project. You’ll pay an overall fee and then additional fees that vary by donation amount.
Fees
5% of all funds raised as a Kickstarter fee
3% plus $0.20 CAD payment fee for pledges over $10
5% plus $0.05 CAD for pledges under $10
Pros
Name recognition means you’ll have more visibility.
You get a bit of a fee break on smaller donations.
Cons
Project must fit Kickstarter’s categories and requirements.
The platform limits the types of projects you can fund.
More people have raised money on GoFundMe than on any other platform. It has a community of more than 25 million donors worldwide and supports just about any cause, including animal welfare, education, medical emergencies, charity, business and travel.
GoFundMe is all about flexibility. Sign up for either a personal or charity campaign and continue collecting funds well after you’ve reached your goal.
How GoFundMe works
Like Kickstarter, GoFundMe is a platform to raise donations toward a project. You’ll pay an overall platform fee and a fee on each donation.
Fees
0% platform fee (for personal campaigns started in CAD, USD, GBP and some European countries)
2.9% plus $0.30 CAD processing fee for each donation
Pros
Widely recognized brand, which helps with fundraising.
GoFundMe waives processing fees for charities.
There are no deadlines or minimum fundraising goals.
Cons
You won’t get many donations from strangers.
Takes a long time to receive funds (1-7 business days for new donations to be verified, then 2-5 business days to reach your bank account)
Indiegogo
Indiegogo is the biggest crowdfunding name that specializes in entrepreneurs. It’s raised more than $1 billion for design, technology and innovation projects since it began operations in 2008. It also provides assistance every step of the way, from concept to marketing.
How Indiegogo works
Similar to other platforms, you’ll pay a general platform fee and then a fee on each donation. You’ll also pay a transfer fee each time funds are sent to your bank account.
Fees
5% platform fee
2.9% plus $0.30 CAD transaction fee per donation
$25 transfer fee every time funds are sent to your bank account
Pros
Focused on creative services, marketing and communications, prototyping, production, retail, licensing and distribution.
Lower fees for charitable campaigns.
Cons
Campaigns are limited to 60 days (Indiegogo may choose at its own discretion to extend the deadline)
You must provide rewards, even if you don’t receive full funding.
Industry-specific crowdfunding sites
Chances are there’s a platform for people in your specific industry. If so, these platforms typically tailor services to your needs and can attract backers looking to fund a project just like yours.
Here are just a few examples of crowdfunding sites to check out:
Appbackr is designed to help app developers get their apps off the ground.
Experiment (formerly Microryza) offers scientists a nontraditional way of funding research.
Crowdfunder
Crowdfunder is an equity crowdfunding platform with a focus on connecting entrepreneurs and investors. With more than 12,000 individual and institutional investors in its network, it’s funded more than 100 unique projects at an average deal size of $1.8 million. It contributes to startups at all stages and has fundraising coaches on hand to share industry knowledge and help optimize your pitch.
How Crowdfunder works
Crowdfunder is an equity-based platform that shies away from reward-based crowdfunding. Instead, investors claim a small stake in your company and sees a return in future profits.
Fees
$299–$499 USD monthly membership fee
Pros
Can benefit fundraising at all stages.
Easy for investors to browse niche ventures.
Cons
High monthly fee could deter new businesses.
No access to smaller investors.
GoFundMe Charity (formerly CrowdRise)
Nonprofits and charities might want to consider using GoFundMe Charity, which is designed specifically to help these types of organizations raise funds. Me To We, the American Red Cross, UNICEF and many other organizations regularly turn to this platform to raise money.
As of June 19, 2020, it offers Free and Flex plans, however, Free plans will only be available for a limited time. Clients with enterprise-level needs can contact the company directly to discuss a unique pricing arrangement.
GoFundMe Charity was launched in 2018 after GoFundMe acquired CrowdRise, a for-profit crowdfunding platform founded in 2010 to help organizations raise money for charity.
How GoFundMe Charity works
GoFundMe Charity is a flexible fundraising option for people or events centred around charitable giving. You have no goal requirements or deadlines to meet, and its customer service team lends a hand with marketing your campaign.
Fees
Platform fee of 0% (free plans – for a limited time) and 3% for flex plans
Processing fee of 1.9% plus $0.30 USD (free plan – for a limited time) and 2.2% + $0.30 USD (flex plan)
Pros
Integrates with popular applications like WordPress, Salesforce, Mail Chimp and more
Flex plan users can allow donors to include the platform’s fees in their donations
Provides “Donate” button that can be embedded into users’ websites
Unlimited events, pages, campaigns, team members and fundraisers
Cons
Must have a PayPal business account and be enrolled in the PayPal Giving Fund to get on the GoFundMe Charity list
Donations made after the 15th of the month are received the following month
Crowd Supply
Crowd Supply launched in 2012 with product designers in mind. Though it shares some of Kickstarter elements, this Portland-based platform is essentially a preorder store. Instead of donating to a campaign for a reward, supporters preorder a product that needs funding as a way of supporting its manufacturing.
How Crowd Supply works
Crowd Supply is a little more exclusive with crowdfunding ventures. You’ll need to first pitch an idea to a team of experts and prove that if you raise the funds you’re looking for, you’ll be able to handle and carry out production. If you fail to meet a campaign funding goal, donations are refunded to your supporters.
Fees
Platform fee of 5% to 15% of your goal
2.9% plus $0.30 USD fee per donation
Flat fee per distributed item if you use Crowd Supply’s fulfillment services. Fee is based on item’s dimensions and shipping costs within the US (international backers will pay a surcharge to cover additional shipping costs).
Pros
Expert guidance with campaign review and management.
After your campaign ends, you can sell your product on the platform.
Cons
Potentially high fees.
Smaller backing community.
Experiment (formerly Microryza)
Launched in 2012, Experiment is an online crowdfunding platform that aims to discover, fund and share scientific research around biology, chemistry, physics, mathematics, engineering, earth science, computer science and medicine.
How Experiment works
This all-or-nothing platform allows backers to donate to fresh or ongoing research and experiments. People who back campaigns have access to lab notes and research results as the project unfolds. If a campaign fails to reach its goal, backers are not charged.
Note that Experiment is not always accepting new project submissions. Visit experiment.com/faq to learn more.
Fees
8% platform fee
3% to 5% payment processing fee
2.9% plus $0.30 USD fee per donation
Pros
Provides additional grants to projects under specific categories.
You maintain complete ownership and intellectual property rights.
Cons
No funding if your campaign doesn’t reach its goals.
Platform comes with high fees.
Mightycause (formerly Razoo)
Campaigns on Mightycause have raised over $600 million for important causes – more than most of the biggest crowdfunding names combined. You can use this platform to fundraise for large, community-led or corporate events or smaller, individual causes.
Mightycause encourages charitable donations through events like Giving Day, a daylong community-based competition where nonprofits sign up and try to get the most donations.
How Mightycause works
Mightycause makes crowdfunding easy for both small and large projects. It provides a free starter plan that supports unlimited campaigns, donations tools that can be embedded on your website and both peer-to-peer (P2P) and event fundraising.
For $99/month, the advanced plan offers access to a CRM dashboard, email marketing tools, data integration tools and a donation form that can be embedded in your website.
Fees
Processing fee of 2.9% plus $0.30 per donation for personal campaigns
Processing fee of no more than 2.2% + $0.29 per donation for charitable campaigns
Pros
Expert guidance from a fundraising coach.
Donors can choose to cover processing and platform fees as part of their donation
Have an idea for a product or technology that could make you rich — if only you had the funding? And the designer, the marketing team and … well, everything else. Quirky was built with you in mind: It’s a site that crowdsources ideas.
How Quirky works
You submit your idea, and the Quirky community decides if it’s worth funding. If greenlit, you receive a small percentage of royalties from your produced idea. Since you’re not doing the heavy lifting, you don’t end up with a large percentage of profit from your royalties.
Fees
95%–98.5% of revenue from your product idea
Pros
Minimum effort in developing a product.
No fees — so you don’t stand to lose much.
Cons
Limits your control over product design.
You only get 5% to 1.5% of your revenues.
FundRazr
This Canadian crowdfunding platform has something for every fundraising campaign. FundRazr can work with you to access your funds right away or wait until you’ve reached your goal. It’s especially great for nonprofits, offering a service that connects you with people who are interested in getting involved in your fundraising efforts.
How FundRazr works
Donation campaigns are free to create, and you can choose from keep-it-all or all-or-nothing. Campaigns are subject to varying fees, though contributors are allowed the option to cover fees.
Fees
Platform fee of 0% (free tier) or 5% (standard tier)
Payment processing fee of 2.9% plus $0.30
Pro tier allows professional fundraisers to create their own pricing scheme
Pros
Versatile design platform allows you to personalize your campaign.
Intuitive website is easy to use.
Cons
Backers are typically limited to your personal network.
Takes some time for your campaign to go live.
Bottom line
With the emergence of more and more online crowdfunding platforms, there can be a lot to sift through to find the one that’s right for your business. The 10 websites listed here should give you a good overview of your top options. Be sure to consider the fees the website charges before setting up a campaign in order to avoid surprises once the money starts coming in.
Aliyyah Camp is a writer and personal finance blogger who helps readers compare personal, student, car and business loans. Aliyyah earned a BA in communication from the University of Pennsylvania and is based in New York, where she enjoys movies and running outdoors.
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