For years, small business owners often turned to traditional sources when it was time to raise money for their startups. From accredited investors and angel investors to business loans and venture capitalists, access to funding felt like it was limited to these more formal options.
But today? Crowdfunding is a far more mainstream financing choice. Thousands of entrepreneurs are turning to crowdfunding sites to finance their small businesses, and the U.S. saw $17.2 billion in crowdfunding revenue in 2020 alone.
Despite its growing popularity, crowdfunding can be intimidating for business owners—particularly when it comes to finding the best crowdfunding platform for their own fundraising campaigns.
Below are eight online fundraising sites that are worth checking out.
When you think of crowdfunding websites, Kickstarter is likely the first to come to mind. Founded in 2009, the platform is unique in that it rewards people for donating. Those who support a project (often called funders or backers) receive perks—from a product to a unique experience—depending on their level of investment.
Who it’s good for: The vast majority of projects on Kickstarter are creative in nature. It’s also worth noting that, given Kickstarter’s unique approach, you need to have a specific project for people to donate to that leads to a final deliverable. That means this isn’t the site to turn to if you have a less tangible goal, such as getting a service business off the ground.
What it costs: Here’s another important caveat with Kickstarter: If you don’t raise 100% of your funding goal, you get none of the cash and donations are returned to donors. If you meet your goal? Kickstarter has a 5% fee, and the payment processor will charge an additional fee. Payment processing fees are 3% plus 20¢ for each pledge over $10, or 5% plus 5¢ for each pledge under $10. If your funding initiative isn’t successful, you won’t pay any Kickstarter fees.
GoFundMe is another big name among the best crowdfunding sites. While plenty of businesses use the platform, it tends to skew mostly toward individual people aiming to raise funds for something in particular. This could be anything from covering medical bills to paying for education or supporting a cause.
Who it’s good for: GoFundMe touts the fact that it’s for “personal causes.” which means there are a lot of individuals on the platform. That makes it ideal for entrepreneurs looking for money to open a new venture, support their company through a downturn, or even take their existing business to the next level.
What it costs: GoFundMe is another platform where you must meet your fundraising goal in order to collect. How much does GoFundMe take? For campaigns started in U.S. dollars, there is no platform fee (it’s 5% in select other countries). You’ll also pay 2.9% per transaction, plus an additional 30¢ per donation. That includes any debit or credit card charges.
Indiegogo isn’t quite as niche as the other platforms, meaning you’ll find a solid mix of causes, businesses, and individuals on the site. Additionally, Indiegogo stands out from other crowdfunding sites, as it offers two different types of crowdfunding: flexible funding or fixed funding. Flexible funding doesn’t require you to meet your fundraising goal to collect. However, you will pay a higher fee if you don’t reach your target. You can also opt for fixed funding, where you’ll only get the money if you hit your fundraising goal.
Who it’s good for: Just about every industry is covered on the platform, making it a good fit for almost anybody.
What it costs: Indiegogo’s fees are broken into three different categories:
- Platform fee: 5% of all funds raised for your crowdfunding campaign. These are calculated and deducted from the funds you actually raise, rather than your funding goal.
- Transaction fee: Varies based on country but is usually around 2.9% plus 30¢ of every transaction.
- Transfer fee: These might occur when Indiegogo transfers money to your bank account. The price depends on your country—for example, it’s $0 in the United States if you have a U.S. bank account.
Another crowdfunding platform with an emphasis on creative projects, Patreon works with a subscription or membership model. This means that donors provide regular contributions, rather than making a donation in one lump sum. With a tagline of “Change the way art is valued,” the platform is designed to support creatives in pursuing their passions and making things others enjoy.
Who it’s good for: Because Patreon prides itself on supporting creators (from podcasters to game creators to artists), this platform is best if you’re pursuing a creative venture.
What it costs: The price that fundraisers or business owners pay for Patreon depends on the plan they choose. The “Lite” plan will cost 5% of the monthly income you earn on Patreon, the “Pro” plan runs at 8% of your monthly income, and the “Premium” plan will take 12%. You’ll also pay for payment processing, with a standard rate of 2.9% plus 30¢ for each successful payment over $3.
Moving away from passion projects, Wefunder is designed specifically for startups and small businesses in all sorts of industries—from health care to beer brewing. The platform is meant to give angel investors an outlet to support businesses, as well as founders access to the money needed to start their companies. It uses an equity crowdfunding model, meaning people are investing in companies in exchange for securities, as opposed to donating with no expectation of return.
Who it’s good for: Wefunder prides itself on being built for any type of founder and small business, whether you run a coffee shop or a movie studio.
What it costs: If you reach your fundraising goal, you’ll pay 7.5% of your total fundraise. Wefunder states that there are no other sneaky payment processing charges or monthly fees, and they’ll match a better price if you find one. If you raise a much larger sum of money under Regulation A+, you’ll pay Wefunder a flat fee of $375,000. Regulation A+ is a section of the JOBS Act that allows businesses to raise up to $75 million from accredited investors and the general public.
GoGetFunding may be a site you’ve heard less about despite the fact that it’s been around since 2011. But it’s another great option, particularly for those who are looking for some flexibility in terms of the projects they can fundraise for. Additionally, GoGetFunding allows fundraisers to keep the money raised whether they meet their target or not.
Who it’s good for: GoGetFunding empowers users to raise funds for any cause—whether it’s business related, personal, or for a nonprofit.
What it costs: GoGetFunding charges a fee of 6.9%, which sounds high when compared with the others. However, it’s worth noting that this fee includes both the 4% platform fee and the 2.9% payment processing fee. This makes it a bit more cost-effective than most of the other options out there. Much like the other crowdfunding platforms, you’ll also pay a 25¢ or 30¢ handling fee per transaction if you use PayPal or Stripe.
Haven’t heard of Ulule? That could be due to location—it promotes itself as Europe’s first crowdfunding site. But don’t be intimidated by this international approach. It’s still a great option, particularly for those who are looking to fund social good initiatives or creative projects.
Who it’s good for: Ulule says its purpose is to “make good things happen,” which means it’s a solid choice for a variety of projects. However, the audience tends to skew more toward creative or sustainable initiatives.
What it costs: Ulule is another platform that takes an “all or nothing” approach. If you don’t meet your fundraising goal, money will be returned to donors. Ulule’s fee for projects that collect donations in currency other than euros is 6.67% (value added tax or VAT not included) for credit cards. It’s 4.17% (VAT not included) for donations made using checks.
The largest U.S. equity crowdfunding platform, SeedInvest helps startups and small business owners across all types of industries raise funds from over half a million investors. They’ve helped businesses raise over $300 million online and are aimed primarily at early-stage and high-growth companies.
Who it’s good for: SeedInvest has a more thorough process that requires businesses to apply to be listed on the site and go through due diligence. This makes it a suitable choice for companies that have their feet under them and plan for major growth. You’ll need to share some basic information about your business and fundraising goals, as well as include your pitch deck if you have one. You should hear back about your application within two to three business days.
What it costs: SeedInvest is another platform that only collects for successful campaigns. In that case, you’ll pay a placement fee of 7.5% of what you raise on SeedInvest and an equity fee of 5% of what you raise.
Get the money your new business needs
When it comes to raising money to establish or grow your business, you have more options than searching your couch cushions for change or pursuing traditional venture capital. There are plenty of platforms that will help you crowdfund support and raise money online for your startup.
The best way to get started is to consider your own needs and your goals. With those in place, you can begin to zero in on which fundraising platform will work best for you. Then you can launch your campaign and keep your business moving in the right direction—without turning your own pockets inside out.
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