Standard crowdfunding started out as donation-based fundraising for businesses or creative projects via an online funding platform. Project creators set a fundraising goal and deadline, donors donate and the crowd funding platform charges a small fee for their service. Some have an application process and others don’t. The type of funding offered are usually based on an:
- All or Nothing Model: When the fundraising period is over, the pledged money is only collected from the contributors if the fundraising goal is met. If the goal is not met, no money is collected, i.e you don’t get any money.
- Keep it All Model: Whether the goal is met or not, all the money is given to the entrepreneur minus the commission.
Some platforms offer a choice of either or.
They can also be classified a
- Donation based fundraising
- Debt based fundraising.
- Equity based fundraising.
Here’s a very brief overview of some of the donation-based crowd funding platforms available to you
kickstarter.com is one of the most popular crowd funding sites, they focus on creative ideas in design, arts, gaming and technology. They have a rigorous selection process. The model they follow is the all or nothing model. Their website says that 44% of projects have reached their funding goals. Creators have 100% ownership of their work, funders may get rewards from the creator (funded). If a project is successfully funded, kickstarter applies a 5% fee to the funds collected. According to the stats provided on their website, out of the most successfully funded projects, the top three categories were: Music, film and video and art.
indiegogo.com’s projects are in three broad categories: Creative and performing arts, causes and entrepreneurial ventures. You’ll have to choose between flexible and fixed funding. They take 4% fees if you reach your goal in either funding choices – flexible or fixed. If you don’t reach your goal, in a flexible funding you keep what you earned but you give up 9% in fees. For fixed funding, you get nothing and the collection is returned to the backers.
There’s no application process, so decide on the amount you want to raise and your deadline, create a pitch video and in it convince people why they should back you and create your campaign. Also, figure out what kind of rewards you want to offer your backers, it could be anything from a discount on your product to a thank-you party.
gofundme.com is a crowdfunding platform for personal projects like medical emergencies, natural disasters, community projects, etc. Create your page, share with friends and collect donations. They take 2.9% plus $.30 for every transaction.
kapipal.com is an international platform for personal crowd funding. No fees are charged, you just set up your Kapipal page and start collecting contributions, of course you’ve got to let people know about your cause, so send your page’s url to your network, announce it on your social networks and get the word out there. All money contributions are donations, perhaps you can set up some kind of reward for your donors, like a tee-shirt or goodie bag. All money transactions are done through paypal.
peerbackers.com offers an online “crowdfunding” platform to help raise money by attracting many small donations from a large group (friends, family, professional & social contacts) to meet a funding goal and donors receive rewards or perks for their contributions. Submissions are reviewed and once you’re approved to fundraise on their platform go ahead and let everyone in your network know. If your goal is reached you’re charged 5% fees and all the funds go the project creator, who is responsible for delivering the rewards to the backers. If the goal isn’t reached there are two things that can happen, one, if you’re able to still deliver the rewards to the backers all the funds raised will be handed to you but if you can’t fulfill the rewards without reaching the goals, then the money is returned to their backers.
somolend.com provides small business loans funded through social local lending. If you’re a small business looking for loans or an investor looking to invest in a small business, this is the platform for you.You communicate your needs and negotiate with them and if it works for both the lender and you, you get accepted. After the fundraising campaign ends, you transfer the monthly loan payments to SoMoLend and they pay the lender every month for the life of the loan.
“SoMoLend provides a secure platform that automates the business loan campaign development process, interest rate negotiations, contracts, fundraising progress, and payments.” (somolend.com)
They’ve added a new branch to their lending where they enable you to borrow from friends and family or your immediate circle of contacts, they receive a return on their investment in the form of interest.
rockethub.com lets you keep your funds whether or not you reach your goal but if you reach your goal they take 4% commission, and if you don’t reach your goal, they take double that in fees. Rockethub has a partnership with A&E for Project Startup where they will support innovative entrepreneurs with seed money and possible national exposure.
artistshare.com is a website that connects creative artists with fans allowing them to share in the creative process and fund the creation of new artistic works. ArtistShare created the Internet’s first fan funding platform for artists.
healthfndr.com focuses on innovative startups that are in the health care field. It is highly curated
app split.com is a crowdfunding website where you can raise funds for your apps and sell them (developer) and bid on app ideas as a backer.
appbackr.com is a donation based funding to get apps off the ground and running.
foodstart.com helps restaurants and food trucks raise capital online in small amounts. In exchange, backers receive great perks like food discounts, guaranteed tables, and behind-the-scenes tours all redeemable with a physical card they receive in the mail.
microryza.com is crowd funding for science and research projects.
petridish.org where you fund science and explore the world with renowned researchers.
youcaring.com is a simple, FREE online platform created for people who want to fundraise for causes they care about. From medical expenses, to memorials and mission trips or even pet care — if it’s important to you it qualifies you to set up a free online fundraiser. They provide you with customizable personal fundraising webpages to help you spread your cause and raise support. No fees or commission.
Create Your Own Crowfunding Platform.
ignitiondeck.com – your own custom crowdfunding platform. Do you want a crowdfunding platform on your own website with no middlemen? There’s IgnitionDeck – a wordpress crowdfunding plugin. There are three different pricing options, as of now starting at $79, which can be used for an unlimited number of campaigns. The IgnitionDesk Enterprise will let you build a crowd funding platform like kickstarter. They do not charge a fee so you get to keep all your donations. Works if you have a known market you can get to pledge and have resources and ways of getting the word out there.
www.selfstarter.us provides the source code to create your own crowdfuding website. So find a programmer or if you’re good at it, and have the time, this would be for you. It’s totally free.
crowdvalley.com is the site to go to if you need help with crowdfunding infrastructure, platforms and associated in the areas of energy, lending, real estate and securities. So you subscribe to a platform, set up your own online funding portal and run it with powerful management tools.
Equity & Loan Based Crowdfunding
lendingclub.com – where you can get personal loans from investors at lower rates than banks, but yes of course it depends on your credit score and history. Borrowers apply for a loan, get funded and start making payments. Investors open an account, build a portfolio, earn and reinvest.
fundable.com allows you to create your company’s profile and choose a rewards or equity fundraiser, for rewards be prepared to provide your backers with some kind of reward, e.g. a copy of your product and for equity based fundraiser, which by the way is only for accredited investors, and you offer a stake in the company. The rewards based fundraiser typically collects less than $50,000. There’s a $99/month fee for their services.
fundingcircle.com funds business owners with money from accredited investors. If eligible, you complete an online application. Within 48 hours you’ll receive indication of your credit standing, submit materials for verification and receive final approval and funds within 5-14 days when all materials are provided. The money you receive is not crowd sourced, instead it is backed by accredited investors and these platforms do allow investments at lower levels such as $1000, $3000 per investor.
angel.co is a platform that brings together startups and investors. You set up your profile and they will review your profile and if approved, you’ll get featured to matching investors. You use the site like a social network.
microventures.com connects angel investors to startups. They look for startups and existing businesses with an unique idea or an innovative spin to old technology that need between $100,000 and $1,000,000 in capital. Their primary areas of interest are internet technology, media and entertainment, software, green technology, mobile, social and gaming. Some of the variables used to measure if your business would be a likely candidate include: evaluation of suitable risk, likelihood of profitability and willingness to give up equity.
Consumer Product Focused Crowdfunding
circleup.com is a crowd funding platform that connects investors and innovative consumer and retail companies. Only 2% of companies that apply are accepted. They look for consumer and retail companies that have substantial revenue and other indicators of potential success. Companies have to have more than 1 million in revenue and a tangible product you can touch, taste or visit. Their main focus is high-growth consumer products in food, beverage, personal care, pet products, sporting goods, apparel, household product, retail and restaurant industries.
They have a large team of investors that have hands on market experience. CircleUp’s average funding time is 2-3 months and they also have partnerships with strategic companies in the marketplace whose expertise can be utilized by growing business with a great product.
crowdsupply.com is unique in that they support you at different stages of your progression in getting your product out to consumers – from conception to delivery. On submitting a concept for approval, you get engineering, marketing and business guidance. They make introductions to potential manufacturers and suppliers. Collect email addresses on a coming soon page featuring the name and image of your product and work with you to prepare a list of media to notify them of your product as soon as it launches. What sets Crowd Supply apart is that once your fundraising goal is met, they offer creators pre-order management, warehousing and fulfillment to help make the transition to operating a business easy. Pre-orders run from end of campaign to the order fulfillment of orders taken during the campaign. They can also continue to help you in retail sales either by buying inventory from you or by taking orders for drop shipping. There is no set fee structure, they are to be negotiated. Also, they release funds to the entrepreneur as soon as minimum goals are reached so they can reach their delivery deadlines. Like Kickstarter, they take 5% of the funds raised in fees. Order fulfillment is separate from raising funds and has separate terms.