Crowdfunding has become a common way for startups and small businesses to raise money to launch a product, fund a project, or grow. But with so many crowdfunding sites out there, it’s hard to know which one is best for your campaign. Some cater to a more general crowd, while others focus on a specific niche or industry.
In the crowdfunding world, Kickstarter is an old and seasoned brand, despite it being founded in 2009. The idea is that those seeking funding give “investors” perks, such as products, T-shirts, or unique experiences, based on their level of investment.
Who It’s Good For: Kickstarter projects tend to be creative in nature, with projects raising money for things like a balance bike made of wood or creative art books. You can create projects for other categories like food and technology, but by far, the focus is on music, art, crafts, and design. Keep in mind: Kickstarter only funds projects, meaning you must have a deliverable, like a book or a play, instead of as nebulous as “starting a business.”
Funding Details: Kickstarter takes the “all or nothing” approach: if you don’t raise 100 percent of the goal you set, you get none of it. The site takes 5 percent of the amount raised, and the payment processor takes another 3 to 5 percent.
This crowdfunding site leans more toward personal use, with people raising funds for emergencies or to help pay for their education, but you’ll also find a business component to GoFundMe.
Who It’s Good For: GoFundMe is ideal for local businesses trying to rally a community to help them launch or grow. Some current examples include a woman looking to expand her baking operation, and a man looking to open a southern fusion restaurant.
Funding Details: GoFundMe also uses the “all or nothing” approach. Its fee is 5 percent, and payment processors charge between 2 and 3 percent.
While Kickstarter and GoFundMe tend to appeal more to consumers looking to support small businesses, EquityNet caters to investors. Investors don’t get perks, other than owning a piece of the company.
Who It’s Good For: EquityNet is more industry-focused than other sites that cater to creative types and product inventors. Its target industries include health care, industrial & manufacturing, biotechnology, and computer hardware and software, among others.
Funding Details: Unlike other crowdfunding sites, EquityNet doesn’t charge a fee for raising funds. It operates as a subscription service. Some services are free, while others fall under the $109-per-month plan.
This is a pretty diverse crowdfunding site, with no specific industry focus. Indiegogo does not use the “all or nothing” requirement, but it does charge a higher fee if you don’t reach your goal.
Who It’s Good For: Just about every industry is covered, from the environment (think: raising money for clean water refill stations in India) to small business (all-female auto body repair shop).
Funding Details: Indiegogo offers both fixed and flexible funding. Fixed funding is ideal if your campaign can only continue if it raises a certain amount of money — like if you need $10,000 to buy a piece of equipment — while flexible is better if your campaign will benefit from any type of funding, such as if you want to save a business in trouble and don’t need a specific amount to do so. The fee for either is 4 percent, but if you don’t hit your goal with a flexible funding campaign, the fee is 9 percent. There’s no fee for a fixed funding campaign if you don’t hit your goal.
RocketHub is interesting because it partnered with A&E for its Project Startup. The television network will select crowdfunders to be featured on-air, online, and in A&E’s magazine, The Idea Book for Educators. A&E will also invest in selected RocketHub projects.
Who It’s Good For: RocketHub caters specifically to projects in these categories: art, business, science, and social.
Funding Details: If you reach your goals, the commission is 4 percent, plus a 4 percent credit card handling fee. If you don’t reach your goal, the commission goes up to 8 percent, plus the card handling fee.
Crowdfunder aims to provide investors with the chance to get in on investment opportunities that have typically been exclusive to Silicon Valley venture capitalists or industry insiders. In addition to connecting entrepreneurs with investors, the site also offers a lot of resources to help investors raise money.
Who It’s Good For: Because Crowdfunder attracts accredited investors (think industry leaders and CIOs of technology companies), the fundraising goals tend to be higher. Businesses in industries like IT, real estate, and health care (among others) can raise hundreds of thousands to millions of dollars. It’s a good place to find innovative ideas like a notary service that can be conducted via online video.
Funding Details: You pay no fee to get your funding, but you do have to pay a monthly subscription service fee (the amount is not disclosed on the site).
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