Digital technology has made crowdfunding very easy. Several online crowdfunding websites provide this service, whether you want to raise some money for your entrepreneurial venture, a nonprofit cause, or a personal need.
According to Fundera, these sites generate $17.2 billion per year through crowdfunding in North America alone. That’s because online crowdfunding platforms offer easy-to-use tools for fundraisers and supporters.
So, what are some of the best crowdfunding websites today, and which one is suitable for you? To help answer these questions, we researched the top seven platforms.
We looked at their ease of use, fundraising history, pricing details, general customer perception, and more. Whether you are a social activist, a budding artist, or an entrepreneur, the information in this article will help you find a suitable crowdfunding platform for your needs.
Different Types of Crowdfunding
Before diving into the top 10 list, let’s take a look at the three main crowdfunding types:
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Reward crowdfunding is when you raise funds by reaching out to your sympathizers. You reward them with a small gift or a product sample when they achieve a milestone (like pledging a certain amount).
As the name implies, debt crowdfunding is when you receive a loan – instead of money – with the help of crowdfunding. After receiving the loan, you have to return it in a specific period.
In Equity Crowdfunding, you give up a portion of your company’s ownership to the crowd. Nowadays, early-stage companies and startups employ equity crowdfunding to raise funds for their business launch.
The 7 Best Crowdfunding Websites of 2022
With a fantastic record of successfully helping over 800,000 projects worldwide, Indiegogo is the best overall crowdfunding platform today.
Approximately 15 million people visit its website every month and launch 19,000 crowdfunding campaigns (on average). The reason is it has an excellent feature-set for both entrepreneurs and investors.
Because of its extensive network in 235 regions worldwide, you can create a crowdfunding campaign for your idea or product and get support from anywhere in the world. To start collecting funds using Indiegogo, you have to start a campaign for a max period of 60 days.
The platform fee is 5%, with 3.2% third-party payment processing charges.
For campaigns, you can choose between fixed or flexible funding. Fixed funding returns all the funds to the donors if you fail to achieve your goal.
It is ideal for startups that need a certain amount of cash for their launch. On the other hand, flexible funding works best for social causes because you retain whatever funds you receive.
What’s more, you can easily integrate your Indiegogo campaign with other platforms such as Meta, Google, Shopify, etc., to reach a wider target audience. Once your campaign ends, you can receive the raised amount directly to your bank account within 15 working days.
If not, you can invest in any of the ideas/products on its platform and become a campaign supporter.
Crowdfunding for startups can be a challenge. Kickstarter helps overcome this challenge. It assists tech startups, and creative entrepreneurs fund their campaigns before raising money or loans for venture capital.
According to Statistica, Kickstarter has completed 32,978 projects since its inception in the music category alone. It has an overall success rate of 39.37%.
As of November 2021, Kickstarter has raised approximately 6.2 billion in a number of verticals. The platform is straightforward to navigate and use for fundraisers.
You can start by setting up your goals and a period to accomplish the objective, usually anywhere from 1 to 60 days.
However, you will have to get your project approved by Kickstarter before raising capital. Besides, it’s an all-or-nothing platform. That means you cannot get any of your funds unless you have successfully achieved your target.
Additionally, backers can cancel their pledges at any time. While it’s an advantage for backers as it mitigates the risk, it can be frustrating for the fundraiser.
In Indiegogo vs. Kickstarter, Kickstarter fees consist of a 5% charge on the overall amount. This is in addition to the 3 to 5% payment processing charges per transaction. There’s also a waiting period of 14 days to transfer funds to your bank account if your campaign succeeds.
GoFundMe is a very versatile fundraising platform to raise funds for yourself, family, friends, a charity, or a business. So far, this crowdfunding platform has helped raise over $9 million, thanks to over 120 million donations. Its simplicity and success have made it the top fundraising choice for individuals.
You have probably come across a GoFundMe campaign on your social media at one time or another. It has helped people raise funds for everything, from personal medical expenses to social justice causes and keeping their small businesses alive.
That’s because it’s a Keep It All platform, so you get everything you raise. Plus, there are ZERO campaign fees for personal causes if you are based in the US.
How to set up a go fund me, then? Well, it’s pretty simple. First, create your campaign by setting up an amount you wish to raise. There are no time limits, so you can raise money for as long as you want.
Next, you have to tell your story to influence people. It can include videos, pictures, or gifs. Finally, you have to share the campaign with your friends and family via social sites, email alerts, or text messages.
While there are no platform fees, GoFundMe does have a processing fee. The platform deducts 1.9% as a third-party processing fee and $0.30 per transaction.
Overall, GoFundMe hasn’t had as much success as its competitors in the past. Only one in 10 campaigns have been able to achieve their goals.
Patreon is relatively new but popular among creative professionals. Because of an easy-to-use fundraising process, it has attracted over 200,000 creatives in a short span of 8 years.
So far, they have collectively brought in $2 billion in funds. Instead of a one-off campaign model, it uses a subscription model where “patrons” can contribute a set amount of money regularly.
The website helps artists foster a better relationship with their followers. They can deliver exclusive content to subscribers as an incentive to keep their interest.
Needless to say, Patreon works best if you regularly share your work. Otherwise, your patrons may stop funding or cancel their subscriptions.
You can start your Patreon account free of charge. Nevertheless, there’s a monthly fee depending on which plan you subscribe to.
The Lite and Pro plans deduct 5%, while the Premium plan takes 12% from the generated amount. Not to mention, there’s the standard 2.9% processing fee and a 0.30 charge per transaction.
However, a significant disappointing aspect of Patreon is that it doesn’t market the fundraisers as much as other crowdsourcing websites. For instance, Kickstarter and Indiegogo have dedicated pages for donors to browse through.
On the plus side, the option to select three plans and easily switch between them any time you want on Patron is one of its major draws.
SeedInvest crowdfunding website is ideal for startups looking to fund their launch. In this regard, it is one of the best Kickstarter alternatives.
It helps raise awareness among angel investors and venture capital firms. So far, the platform has attracted over 500,000 investors and helped 500+ startups raise over 300 million USD, making it a top choice for startups.
You can create an account on this platform by signing up. The website will ask you to fill out the application form and complete the screening process, including a due diligence check.
Once it approves your application, you can create your profile and start fundraising.
Its processing fees are a bit higher, though. You have to take a 7.5% cut on your earnings in terms of a placement fee and a 5% of the total amount as an equity fee at the end of your round.
However, the best thing about SeedInvest is that if your fundraiser fails to meet its objectives, you don’t have to pay any fees.
Overall, good documentation, a generous cancellation policy, and a low-minimum automated investment option make SeedInvest a fantastic crowdfunding platform. If you want investment crowdfunding for business or your startup, SeedInvest is an outstanding place to get some help.
MightyCause is a popular platform for funding nonprofit causes. It has been around since 2006 and, because of its affordability, helped more than 150,00 causes raise over $600 million.
The platform offers one of the lowest cost solutions to crowdfund a cause and comes with some select tools that you can use for free.
From peer-to-peer fundraising campaigns to event fundraising, donor campaigns, and Give days, you can choose from a variety of campaigns to suit your cause. A free “starter” option lets you get started without charging anything.
Other than that, MightCause charges a processing fee of 1.2% on the total amount and 29 cents on every transaction.
You can also upgrade your plan to the “advance plan” by paying $99 a month. The advance plan gives you unlimited access to features like branding, marketing, donor management, CRM integration (Salesforce), etc.
Setting up a fundraising page is quick and easy. So you can start collecting funds in no time.
Mightycause doesn’t require you to set up and meet any goals. At the end of the campaign, you get to keep all the donations you receive. With flexible policies, an easy setup process, minimum platform fees, and no initial approvals, MightyCause is one of the best GoFundMe alternatives.
If you’re looking for sites like GoFundMe, MightCause should be on top of your list.
Fundable is not a crowdfunding site for the masses. It’s a business crowdfunding platform offering hands-on support to startups as they navigate the fundraising process.
This platform gives them the choice of either a rewards-based crowdfunding campaign (Just like Kickstarter) or an equity-based crowdfunding campaign.
And not just funding, Fundable helps in marketing as well. It helps small businesses set up their unique fundraising profiles and share them with personal as well as professional networks.
The website reviews all the profiles before allowing them to raise money to maintain quality.
Therefore, it targets businesses with a solid plan of action rather than starry-eyed idealists with wild ideas to change the world. Moreover, only accredited investors can contribute to equity, making it less suitable for the general public.
In this regard, it is more of an upmarket crowdfunding platform.
Unfortunately, a major limitation of Fundable is that your startup has to be registered in the US to utilize this fundraising app. But, the fact that it has raised $615 million to help different startups so far speaks volumes about its success.
Fundable charges a fixed $179 per month fee for all active campaigns instead of a percentage on accumulated funds.
What Factors to Consider when Selecting a Crowdfunding Website?
There are two main factors you should consider before working with a crowdfunding website. These are:
1. Processing Fees
Crowdfunding websites take processing fees from each contribution. It’s usually a certain percentage of the contributed amount.
Not just that, some crowdfunding platforms charge a fee of up to 8% of your overall earnings. To give you some idea, Kickstarter charges approximately an 8% fee on the overall earnings, along with a $0.20 fee per gift.
Similarly, Gofundme charges 2.9% or 7.9% on the overall amount and $.30 per gift.
2. Payment Model: Keep-It-All VS All-or-Nothing
Whenever you are going for reward crowdfunding, you will come across one of these two models. Keep-it-All or KIA is when the fundraiser sets a particular fundraising goal and keeps the entire amount despite not meeting their objective.
On the other hand, All-or-nothing (or AON) is when the fundraiser sets a specific fundraising goal and keeps nothing until the goal has been achieved. Both these models have their advantages and disadvantages.
Crowdfunding offers individuals, entrepreneurs, small businesses, and organizations to raise money for their needs. All the websites mentioned above work best when you consider their unique features to help with your objectives.
Also, it takes a little bit of luck and a lot of preparation to achieve your goals. Whether it’s for a startup or a social cause, you have to convince people that your campaign is worth backing.
So, pitch your cause to the right people, the right way. Good luck!