Crowdfunding is no longer a new phenomenon today. It has become a popular fundraising strategy to raise funds for a business, project, or cause through a large group of people online. Companies and individuals can use it to garner support for their ideas.
There are three types of crowdfunding: reward, debt, and equity. A reward crowdfunding campaign involves reaching out to supporters and offering them a small gift or product sample in exchange for pledging. On the other hand, a debt crowdfunding campaign involves supporters pledging a certain amount as a loan which is eventually paid back within a certain period. Lastly, equity crowdfunding means that a portion of the company’s stock is given to the investor.
If you’re looking to start a crowdfunding campaign and aren’t sure what you should be looking for when choosing a platform that can best suit your needs, we’ve collated a list of some key features you should look for in a platform as well as some of the best websites available.
Key features to look for in a crowdfunding platform
Given below is a list of the features that you should look for in a fundraising website:
Ease of use
Choose a crowdfunding site that is easy to use and not complex. Additionally, choose a website with content that is engaging and interesting.
Your website should also have email support, a live chat, or a helpline number. Choosing this kind of website will also help build trust in your campaign. Since your supporters will be accessing the website to donate their money, they might need troubleshooting help.
Some of the best crowdfunding websites have easy-to-use social media buttons that make sharing your campaign on your social media a painless experience. Additionally, since your social network is integral to your ability to sell products, these features are necessary.
Crowdfunding fees comparison
Crowdfunding campaigners and investors must pay a certain percentage for raising funds and investing in a campaign. Some platforms charge an extra amount to release your submitted money if you have not met the entire goal. Others, though, have an all-or-nothing model, which means that campaigners only receive the money if they meet or exceed the target goal.
Brand recognition and trust
While choosing a crowdfunding site, remember that selecting a known brand is always a better option. If an investor knows the brand, they most likely trust it and have had good experiences with the business. Additionally, if a company is associated with positive attributes, it would also mean that they are honest.
Top crowdfunding platforms
This next section will take you through some of the Internet’s best crowdfunding sites.
One of the biggest crowdfunding platforms is Kickstarter, a platform built to help tech and creative entrepreneurs bring their ideas to life. On this platform, investors can browse through various verticals to find an idea they connect with.
It is easy to use for campaigners, too. All one needs to do is create a pitch, set a goal, and wait for approval before it’s launched on the platform. It is an all-or-nothing platform which means that a campaigner will not be able to receive the funds pledged unless their complete goal is met.
Unlike other crowdfunding platforms, Indiegogo specializes in no specific campaign type. Individuals and groups can utilize this platform and non-profits to raise money online to fund their tech innovations, creative ideas, or community projects to make their ideas a reality.
Unlike Kickstarter, campaigners can choose between fixed and flexible funding. Fundraisers opting for flexible financing can get their funds irrespective of whether they can meet their goals. However, campaigners opting for a limited budget cannot receive funds if the campaign goal is not met.
One of the websites most popular among digital creatives is Patreon. Unlike other crowdfunding platforms, this caters to YouTubers, podcasters, and bloggers who sign on to the platform and subscribe to the website’s services.
Once they have subscribed to the services, they will be eligible to receive investments or funds from patrols every month or per creation. This website lets creators connect with their fans and deliver content to their subscribers.
In addition to raising money for life events like graduations and celebrations, GoFundMe helps people raise money for challenging circumstances like accidents or illnesses. This platform allows its campaigners to keep the money they have collected even if they cannot meet their target goal.
CircleUp is a platform that offers its users both equity capital and credit financing. It is most commonly used by entrepreneurs looking to scale their companies. Campaigners can connect with the platform with investors, experts, retailers, and entrepreneurs.
In addition to raising money for a start-up without risking collateral, crowdfunding is an excellent way for entrepreneurs to raise funds. Creating a well-thought-out plan will increase your chances of meeting your goals if you put in the time, effort, and patience needed to launch a successful crowdfunding campaign.