Do you have the perfect idea for a product but lack the capital to make it come to life?
Then crowdfunding could be just what you need.
It gives you the ability to raise money from a collective group of people who are connected through the internet and want to support your project.
And it's extremely popular these days.
But before you dive into your first campaign, it's important to determine which of the many crowdfunding sites is right for you.
Let's explore the top five crowdfunding platforms for entrepreneurs and businesses in terms of popularity, types of projects funded, and other basic information so you can choose the best one for your business.
The Benefits of Crowdfunding
First off, you may wonder why you would want to use a crowdfunding platform to launch and fund your project. Here are a few reasons to consider.
- You don't have to give away control, a stake in your company, or future revenue in exchange for funding (like on Shark Tank for example).
- Crowdfunding your idea will force you to set achievable goals and hold you accountable for meeting them.
- People love to share and tell their friends about projects they've backed and major media outlets tend to report on crowdfunding success stories.
So whether you need the funding for your business or not, crowdfunding may be a good option for generating buzz about your idea.
In addition, the fact that you will get a strong customer base right from the start is also a big plus.
Now, let's look at the top crowdfunding websites for entrepreneurs and businesses.
Note that some popular crowdfunding sites were left out of this post because they are only for non-profits and causes vs. businesses and retail product development.
Fees: 5% if you meet your goal plus payment processing fees.
Payments: Amazon Payments
Categories: Art, Comics, Dance, Design, Fashion, Film, Food, Games, Music, Photography, Publishing, Technology, and Theatre
Kickstarter is the most well-known crowdfunding platform for people in the US and UK. Since it launched in 2009, they have helped connect backers with 42,000 projects for a total of $649 million raised.
According to Quantcast, their website receives 9.9 million visits per month globally, which is no doubt a contributing factor as to why so many Kickstarter projects get funding.
The most funded project to date is the Pebble, an e-paper watch for iPhone. Their goal was $100,000 and they received over $10 million from 68,929 backers.
Once nice part about using Kickstarter is there are a lot of resources on how to create a successful campaign. You can start with our guide to running a successful Kickstarter campaign. You can also see some great examples of successful Kickstarter campaigns on Inc and read Mint's guide to a successful Kickstarter campaign.
To boost the visibility of your Kickstarter, refer to 21 Places to Promote Your Kickstarter Campaign and 30 People to Promote Your Kickstarter Campaign. When your campaign is successfully funded, you can read about how to fulfill orders for your Kickstarter backers using Shopify.
Fees: 4% if you meet your goal, 9% if you don't plus payment processing fees.
Payments: Paypal, ACH, Wire Transfer, or FirstGiving
Categories: Art, Comic, Dance, Design, Fashion, Film, Gaming, Music, Photography, Theatre, Transmedia, Video, Writing, Causes, and Entrepreneurial (Food, Small Business, Sports, and Technology)
Indiegogo is a worldwide crowdfunding platform that supports businesses, artists, and non-profits. They launched in 2008 with the goal of making sure that anyone, anywhere could have their dreams realized.
The most funded project to date is the Let's Build a Tesla Museum. Their goal was $850,000 and they received $1.3 million from 33,253 funders.
Be sure to read Indiegogo's Crowdfunding Tips for Campaigners that covers everything from getting started to after the campaign ends. You can also find a year in review of successful Indiegogo campaigns on Mashable.
Fees: 4% if you meet your goal, 8% if you don't plus payment processing fees.
Payments: Secure Check or Digital Payment
Categories: Art, Business, Science, and Social
RocketHub is a worldwide crowdfunding platform that gained exposure through the A&E networks. They have empowered businesses, governments, educators, and communities in over 1,500 projects and are the leaders in crowdfunding education.
Currently, the most funded project to date is Extra Credits, a show about game design and the good games do. Their goal was $15,000 and they received $153,000 from 3,824 funders.
No matter what crowdfunding network you use, be sure to look at RocketHub's Success School for insider knowledge and tools that can help you achieve your goals.
Fees: $99 per month during active campaigns plus payment processing fees.
Fundable is a crowdfunding platform that allows startups to offer rewards or equity in exchange for funding. According to the site, startups that offer rewards typically raise up to $50,000, whereas startups that offer equity usually raise more.
The most funded project to date is DecisionDesk, an application tracking system for educational institutions. Their goal was $1.25 million and which they met.
If you decide to run a Fundable campaign, refer to their blog post on gearing up for a successful crowdfund.
Fees: 5% if you meet your goals plus payment processing fees.
Payments: Amazon Payments
Categories: Advertising to Wholesale
Crowdfunder is a crowdfunding platform for US based businesses with a product or service. They help connect your business to their local networks of 20,000 entrepreneurs and investors.
The most funded project to date is It's For Life, a company producing consumable and convenient health products. Their goal was $7,500 and they received $12,000 from 44 funders.
How to Get Funded
Regardless of which crowdfunding site you choose, here are some things you can do to make sure your campaign is successful.
- Focus on creating a high quality, confident and convincing video. Most project profiles lead with a video and it's usually what people rely on when trying to decide whether to back a project.
- Offer rewards that people will actually want. Put yourself in your customer's shoes when planning your reward levels and incentives.
- Set a realistic funding goal. Crowdfunding websites are meant to give you the amount needed to cover your costs and get your project off of the ground, not to make you a millionaire.
- Promote, promote, promote. Every day until the end of your campaign, promote your project everywhere and in every way that you can.
- Reach out to bloggers and reporters who write about similar crowdfunding projects. Depending on the type of campaign, you could receive mentions on major networks like CNN, Mashable, Techcrunch and others. These types of mentions can have a great impact on whether your project is successfully funded or not.
- Product images are important and professional photography goes a long way. Images can easily go viral on networks like Pinterest and Reddit, driving even more traffic to your campaign.
Over to You
Do you have any experience with these crowdfunding platforms? Have you ever backed a project on one of these sites? If so, what convinced you to pull out your wallet? Let us know in the comments.
Kickstand Theme: From Crowdfunding to Ecommerce
Thinking about launching a crowdfunded project? Then make sure you check out Kickstand, an ecommerce theme designed specifically to help entrepreneurs who’ve just finished a successful crowdfunding campaign keep selling.