So many people have a striking idea, like creating a top innovative smart backpack, an epic video game, a great music album, or the next big social network to take the world by storm. How can they turn their dream into a reality? What crowdfunding sites can fuel their dream project? What crowdfunding platforms should you choose as a backer? Just keep on reading below and you’ll know!
Crowdfunding and Crowdfunding Platforms
As you can guess from its name, crowdfunding is a method of funding where common people fund a personal or business project by donating their own money. So, crowdfunding can be of great help for those who want to take their amazing idea off the ground and succeed.
By the way, crowdfunding isn’t something new. It’s been around for a long time, even before famous platforms were launched. Only, in recent years, crowdfunding has gained special popularity and become extremely widespread all over the world. Regular people love it since crowdfunding allows them to bring their dream project to reality.
People use crowdfunding for so many different projects, including local council park restorations, a 3D printed widget creation, and many more. Of course, backers generally receive rewards of some kind in return.
The fact that more and more people are getting online makes crowdfunding platforms grow in number and offer multiple options. So, the industry is growing at an enormous pace. The great thing is that such explosive growth has resulted in the development of projects that are amazingly innovative and diverse in their scope, reach, and function.
Crowdfunding Platforms for Backers: Pros and Cons
Do you need a place where you can invest in a fantastic idea? Why not go for a reliable crowdfunding platform? Here’re several options to consider:
Kickstarter, a highly popular crowdfunding platform, operates based on rewards. This is a basically project-oriented crowdfunding platform. By the way, Kickstarter is considered the King of crowdfunding platforms. Campaigns on Kickstarter have funded all sorts of gadgets, music, books, films, art, and more.
This is the most popular and well-recognized crowdfunding platform. It has the highest monthly global traffic. Kickstarter campaigns have raised more than $3B. Projects are sorted based on every industry niche. You can find any field here. Kickstarter is especially fine for product and creative project backing.
This platform is based on projects and can’t raise capital on its own. Kickstarter features an all-or-nothing funding model. Backers are charged 5% in fees and, additionally, 3-5% go to payments processors. There is a 14-day waiting period for funds. Email support is limited.
Do you know where the name comes from? Well, “Indie” stands for “independence.” The purpose of the site is to help people raise funds and make their personal project “go-go” without ease.
If the Kickstarter is the King of crowdfunding platforms, Indiegogo is considered to be the Queen... and is Kickstarter’s direct competitor. These two platforms mainly differ in how the goal deadlines work. Also, in case the user fails to meet his/her Kickstarter goal, he/she can’t keep the funds. On Indiegogo, there’s a flexible funding option that allows holding funds in the mentioned situation.
This is one of the most recognized crowdfunding platforms. It boasts huge monthly traffic and offers fixed or flexible funding options. With Indiegogo, users can stay In-Demand after the end of the campaign. There’s no application process or pre-approval. Also, the platform is fine for raising equity round as well. One of the greatest things about Indiegogo is its versatility.
A 9% fee will be charged from those who don’t meet their goal in a “flexible funding” round, plus if they miss the urgency of an all-or-nothing funding campaign. There’s a 3-week waiting period to withdraw funds. Support is limited.
Patreon is ideal for those interested in backing digital content. This crowdfunding platform is the preferred choice for those who have something new to share regularly such as a YouTube video, podcast episode, or blog post. Patreon is ideal for projects that don’t require larger amounts of money.
Patreon doesn't charge money upfront. People can use PayPal and credit cards, based on what option is more convenient for them. Besides, this crowdfunding platform offers a new layer of interactivity.
Patreon's home page introduces people to the platform and convinces you to sign up instead of introducing the service. Anyway, there’re are some tips dedicated to helping people grow their audience.
The monthly subscription model is always there with its upsides, even if there is no new content. Those who need the backlog of content don’t complain. However, inactivity can make a subscriber pay for several months without enjoying any new piece of content in fact.
This crowdfunding platform is ideal for cause-oriented and personal crowdfunding projects. If you’re interested in backing a specific business project or help someone cover immediate business expenses, opt for GoFundMe.
GoFundMe has raised $5B and boasts the largest number of backers: 50M. This crowdfunding platform is free for the user. It can easily get synchronized with social media. Also, GoFundMe provides a Guarantee for donors and beneficiaries. The platform offers 24/7 support.
GoFundMe offers an all-or-nothing approach. The platform charges 5% of each donation. Additionally, another 3% is charged by payment processors. GoFundMe is more popular for donation-based causes and less popular for business funding.
This crowdfunding platform is designed specifically for raising capital for businesses with equity crowdfunding.
WeFunder is the preferred choice for those in need of an easy way to crowdsource investments into their company with the help of the general public and not rewards. So, you can take this into account when deciding which platform to choose for backing. WeFunder has been a successful experience for many users. It has a team ready to support users.
WeFunder is less popular among people. Transparency and over-communication to backers, as investors, aren’t enough.
In recent years, the crowdfunding industry has been expanding rapidly. It now includes both peer-to-peer lending and equity crowdfunding. Many starters and new businesses trust crowdfunding platforms these days. There’s a large variety of options for people interested in crowdfunding and those interested in backing these projects. All you need is to make the right choice and help your dream idea turn into a reality.