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In 2022, crowdfunding as a funding method has been around for ten years and is now mature. Crowdfunding websites have developed into much more than just platforms that raise money- they are wealth management tools with specific features based on users needs
The “best crowdfunding sites for startups” is a list of 12 crowdfunding websites that are expected to be the most popular in 2022.
Low costs, a big audience of prospective investors, and a range of campaigns are all features of the top crowdfunding platforms. They also charge rates that are comparable with starting company loans and enable for the presentation of a wide range of possible ideas. Finally, they have a proven track record of assisting initiatives in achieving their financing objectives.
Crowdfunding allows small companies to raise funds in return for incentives, future payback, or stock in their organization. Startups and established businesses may use the internet to generate financing while gaining new consumers. We’ve chosen 12 crowdfunding platforms that should appeal to a variety of sectors and sizes of small enterprises.
1. Kickstarter: The Best Crowdfunding Platform for Rewards
With over 210,000 successful projects and more than $6 billion committed, Kickstarter is one of the most well-known brands in rewards crowdfunding (and probably the name most generally associated with crowdfunding in general). This success has resulted in the development and financing of a significant number of huge projects, as well as the attraction of a large audience that may serve as a source of finance and visibility for a company.
Who Should Use Kickstarter?
Kickstarter is great for companies that make consumer items such as games, art, technology, music, and cuisine that can be quickly supplied to campaign supporters. Breaking through the competition might be challenging, but raising modest sums of money is an excellent strategy. Over 80% of the successful campaigns raised less than $20,000 in total.
How Much Does Kickstarter Cost?
Successfully funded projects are subject to a 5% Kickstarter fee, as well as a 3 percent to 5% third-party payment processing cost. These rates are comparable with other rewards crowdfunding platforms, and you won’t be charged any fees or get any payouts if your financing campaign doesn’t meet its goal within the specified period.
2. GoFundMe: The Best Crowdfunding Site for Donations
People have collected over $5 billion on GoFundMe, a contribution crowdsourcing platform. There is no equity to give up, no obligation to repay, and no incentives to ship as a result of this. Furthermore, GoFundMe only charges transaction costs after the money are received. However, due to the large number of projects and causes on GoFundMe, it may be tough to get your campaign recognized.
Who Should Use GoFundMe?
GoFundMe is great for companies that can collect fans to finance their campaign without expecting anything in return. This isn’t a good choice for startups unless the founders have a significant following; but, a failing firm that is essential to the community may often gather funding.
How Much Does GoFundMe Cost?
You don’t have to pay any fees for the funds you raise with GoFundMe, and the money doesn’t have to be repaid. You’ll still be accountable for the 2.9 percent + With GoFundMe, you don’t have to pay any fees for the funds you raise, and the money doesn’t have to be paid back. You’ll still be responsible for the fees charged by their payment processor of 2.9% plus $0.30 per transaction..30 per transaction fees paid by their payment processor.
3. IndieGoGo: The Best Crowdfunding Platform for Women-Owned Companies
With approximately $2 billion collected, IndieGoGo is one of the most popular reward crowdfunding platforms for small enterprises. Companies at all stages of development, from concept to product, obtain funds and gain devoted consumers on a regular basis. However, because to the large number of current initiatives, being seen might be tough.
Who Should Use Indiegogo?
IndieGoGo is ideal for companies who produce consumer goods that can be sent as incentives. You’ll be able to establish a community of users who love your product and are involved in seeing you and your business flourish in addition to earning some much-needed funding. Companies at any stage are encouraged to apply; however, many funders like to see at least functioning prototypes. Women-owned companies account for almost half of IndieGoGo’s successful campaigns.
How Much Does IndieGoGo Cost?
IndieGoGo charges a 5% fee on all funded campaigns, plus a transaction fee of 3% plus IndieGoGo charges a 5% fee on all funded campaigns, and you’ll be responsible for a transaction fee of 3% plus $0.20 per transaction. This is comparable to other rewards crowdfunding sites, with the added benefit of a very large network of potential backers..20 per transaction. This is similar to other reward-based crowdfunding services, but with the additional advantage of a wide network of prospective supporters.
4. Patreon is the best platform for content creators.
Patreon is a rewards crowdfunding platform with a twist. Rather of promising supporters items in the future, companies may be compensated as they produce content. The majority of Patreon companies provide some type of entertainment and have raised over $2 billion in total. A creator gets compensated for each episode, picture, or time period in which they create material.
Who Should Use Patreon?
Patreon is great for companies that provide content on a regular basis, such as podcasts, artists, and other forms of entertainment. This is particularly true if your material is normally free and you want to encourage people to donate, or if you have more content behind a paywall.
How Much Does Patreon Cost?
Patreon charges a minimum of 5% for all payments made to artists using their platform, as well as a separate transfer fee of roughly 3% for withdrawing cash. Patreon offers three price tiers: Lite, Pro, and Premium, each with its own set of features and rewards.
5. SeedInvest: The Best Equity Crowdfunding Platform
SeedInvest is the most popular startup equity financing platform. They have over 575,000 investors who have contributed money to their projects, raising an average of $900,000 per project, totaling over $350 million. However, participation is subject to a rigorous verification procedure, with just 2% of applicants being accepted.
Who Should SeedInvest Be For?
SeedInvest is suitable for seasoned entrepreneurs who are beginning their second or third firm and want to raise money using the name recognition of their founding team. You may apply at any time, and projects are available in a variety of sectors, including real estate and e-commerce.
How Much Does SeedInvest Cost?
SeedInvest charges a 7.5 percent placement fee and a 5% equity fee, depending on the amount of money you raise. There are no costs if the campaign is unsuccessful. Due to its availability to early-stage, high-risk firms, this is one of the most costly equity crowdfunding venues on our list.
6. Funding Circle is the best option for debt crowdfunders.
Funding Circle is a debt financing platform for small enterprises. Loans up to $500,000 are available, with rates starting at 4.99 percent and durations up to five years. Funding Circle has raised more than $17.5 billion in total. You’ll need strong credit and recent company development with a high yearly income to qualify.
Who Should Participate in a Funding Circle?
Small companies who need a fast financing without the hassle of a lengthy crowdfunding campaign can consider FundingCircle. It simply takes 10 minutes to apply, but you’ll need at least a 660 credit score to qualify, with successful applicants having an average credit score of 700. You must also have been in business for at least two years and have a minimum yearly sales of $120,000.
How Much Does Funding Circle Cost?
Funding Circle’s loans include interest rates ranging from 4.99 percent to 27.79 percent, with an origination fee of 3.49 percent to 6.99 percent. This puts their overall annual percentage rate (APR) at between 8.5 to 36 percent, which is similar to other debt crowdfunding sites and working capital loans.
WeFunder is the best option for scalable startups.
With $387 million invested since 2013, WeFunder is one of the biggest equity crowdfunding platforms, encompassing every industry from technology to retail and entertainment. Given that WeFunder’s most successful initiatives have shown growth, government contracts, or notable milestones, it may be challenging to attract cash with a fresh new firm.
For Whom Is WeFunder Appropriate?
WeFunder is excellent for companies with a focus on scalability and shown growth, such as breweries, smartphone applications, and combustion engine advancements. Most firms on the platform also bring in around half of their own investors to their campaigns, which might be tough if you’re a tiny company with little or no web presence.
How Much Does WeFunder Cost?
WeFunder charges a 7.5 percent fee, which includes your transaction cost, on the amount you raise with a successful campaign. This is in the same league as other equity crowdfunding platforms.
8. LendingClub is the best option for quick debt crowdfunding.
LendingClub has helped applicants raise approximately $10 billion. It provides small company loans of up to $500,000 via debt crowdsourcing, with periods of up to five years. One of the best aspects of their platform is the cheap initial interest rate of about 7% per year. In as little as one week, loans may be authorized and funded.
Who Should Use LendingClub?
If you need money quickly and are eligible for LendingClub, this is a great debt crowdfunding alternative. You must have been in company for at least 12 months, have strong personal credit, and yearly sales of at least $50,000 to qualify. For many startups and small enterprises, however, these requirements are not difficult to satisfy.
How Much Does LendingClub Cost?
LendingClub loans include interest rates that start at 7% for the best applicants, with an origination charge ranging from 1.99 percent to 8.99 percent. Their loans have an annual percentage rate (APR) ranging from 10% to 35.71 percent, which is similar to other debt crowdsourcing platforms but more than other kinds of small company loans.
MicroVentures: The Best Option for Gamers
MicroVentures is an equity crowdfunding portal that has collected over $450 million for early- and late-stage startup investment. Most firms qualify; however, only qualified investors are permitted to participate, resulting in a smaller pool of potential investors for your company. Projects get money in six to eight weeks and are paid a total fee of 7%.
Who Should Consider MicroVentures?
MicroVentures is suitable for online businesses that need at least $150,000 in capital, such as gaming, mobile, social, and software. Businesses that are currently making sales and are rapidly expanding often have a stronger track record of raising funding on the platform. Consumer-facing enterprises accounted for the majority of initiatives that fulfilled their financing targets.
How Much Does MicroVentures Cost?
MicroVentures charges projects a 5% fee plus 2% equity in exchange for helping them get funds. When a company first files for a campaign on MicroVentures, it is additionally levied one-time costs ranging from $2,000 to $7,000.
Fundable is the best option for IT startups.
Fundable is a small company crowdfunding portal that focuses on obtaining capital via incentives and equity. Since 2012, businesses that have used its platform have funded more than $560 million. For a successful equity round, there are no costs, and for incentives fundraising, there are simply merchant processing expenses. Posting a campaign, on the other hand, is not free and needs a $179 monthly membership.
For Whom Is Fundable Appropriate?
Fundable is ideal for tech firms developing anything from drones to medical equipment and diagnostic software. Completed projects are often organizations that are ready to expand or distribute their goods to a bigger audience from a range of sectors, and they have a high cash value.
What Are the Fundable Charges?
Fundable charges a $179 monthly membership fee for any fundraising. You’ll also have to pay a 3.5 percent transaction charge and 30 cents for reward fundraising. The monthly membership price is exorbitant when compared to many free services; but, given Fundable’s capacity to generate money for its customers, organizations who engage in a real crowdfunding campaign will likely have a greater degree of success.
11. Manufacturers Benefit from Crowd Supply
With 80 percent of projects financed, Crowd Supply assists small firms that produce hardware in obtaining rewards crowdsourcing for their initiatives. They are unique in that they enable businesses to raise funding for both new and finished projects. Furthermore, they have delivered 100% of sponsored projects and even provide the shipping and warehousing space required to assist backed firms’ operations. The average amount raised by a successful project is more than $60,000.
For Whom Is Crowd Supply Appropriate?
Hardware firms with new goods or improvements, ranging from coffee presses to computers or simply individual components, could use Crowd Supply. Backers are rewarded, and you’ll get help with logistics, project execution, a supportive community, and, finally, completing your project.
How Much Does Crowd Supply Cost?
Crowd Supply charges a 5% fee dependent on the amount of money you raise. They also have a premium tier that costs 6 percent to 15% more and includes additional services such as campaign preparation and marketing. While their basic fundraising option is comparable to that of other rewards crowdfunding platforms, their premium features may be too pricey for certain projects.
CircleUp is the best option for consumer packaged goods companies.
With over $400 million funded to date, CircleUp provides loan and equity crowdfunding to small companies, with a focus on the consumer packaged goods (CPG) market. They provide credit lines of up to $5 million that rise as your company grows and adds more customers. Their equity crowdfunding is aimed towards consumer-facing companies, which is a comparable sector focus.
Who Is CircleUp Appropriate For?
CircleUp is great for CPG-focused firms that require equity crowdfunding and have yearly sales of more than $1 million. However, if your yearly earnings exceed $250,000, you may be eligible for a $5 million crowdfunded line of credit.
How Much Does CircleUp Cost?
CircleUp provides a line of credit up to $5 million with an annual percentage rate (APR) ranging from 14% to 25%, inclusive of all costs. This is a competitive rate when compared to other debt crowdfunding platforms, and it is cheaper than most other online loan choices. The costs you pay for equity crowdfunding will be calculated by CircleUp when you apply and will be based on your company.
Choosing the Best Crowdfunding Platform
For small enterprises, there are a variety of crowdfunding options. Each crowdfunding site focuses in a different sort of crowdsourcing, but they may all provide different methods for you to reward your backers. Crowdfunding may be a viable alternative to traditional company financing, especially for companies with a compelling pitch or hook to recruit backers.
The following are the four forms of crowdfunding that are most often offered to small businesses:
- Businesses offer a stake of their firm to investors via equity crowdfunding. This sort of crowdsourcing is best suited for firms that can swiftly develop and scale.
- Debt crowdfunding operates in the same way that a regular company loan does. Borrowers, instead of paying the bank, owe payments to people. A preset APR is used to generate funds. This option is excellent for companies with a good track record of income and credit.
- You may avoid repaying debt or giving up stock in your firm by providing supporters an incentive in exchange for their support. Rewards crowdfunding is perfect for companies who have a product they can ship but require capital before they can start making money.
- Donation crowdfunding is the most challenging alternative for generating cash, yet it does not demand any type of payback. It is ideal for companies to finance their campaigns with the help of their local communities.
Conclusion
Every crowdfunding platform has something unique to offer small companies. You’ll have to determine if you’re willing to give up stock, take on debt, or provide incentives to your supporters. You might choose a more well-known crowdfunding site that will give you more visibility but also more competitors, or a more specialized crowdfunding site with devoted fans. Because not every crowdfunding project will be completely financed, having a backup plan in place is essential.
Crowdfunding is a new way to raise capital for small businesses. It allows anyone with an idea and a dream, to be able to turn that dream into reality. There are many crowdfunding sites available today, but these 12 are the best ones in 2022. Reference: best crowdfunding sites for personal.
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