To finance a new venture without traditional means, entrepreneurs may raise money through crowdfunding, which entails raising small donations from many individuals. For example, artists may solicit funds to keep pursuing their art, startups may seek funds to launch a new project or nonprofits may pursue funds for a social cause.
People contribute to a crowdfunding effort because they genuinely believe in the project or because it promises a service, commodity, equity or something tangible for the amount of money they invested.
To launch a campaign, the organizer publishes details about their venture on a crowdfunding platform like Indiegogo, including a target amount to be raised. Members of the public can then decide whether to back the project. If the campaign reaches its target, funds are transferred to the organizer; if not, funds are returned to the backers.
There are currently about two-dozen online crowdfunding sites. Below, we’ll take a look at top-performing campaigns from six of the best-rated crowdfunding platforms.
Indiegogo
Founded in 2008, Indiegogo is one of the most popular and well-rounded crowdfunding platforms, and it has been a source of considerable success for many new ideas and products. Its relatively simple interface, modest fees and good use of social interaction tools have also helped push it to become one of the most sought-after crowdfunding sites.
Indiegogo success story
: One of the most quickly funded campaigns to run this year on Indiegogo is the Segway SuperScooter GT Series, which had raised $1,096,742 at the time of publication. This translates to a whopping 2,192% of the campaign target amount.
Mightycause
Targeted at nonprofits, Mightycause launched in 2006. Its charges to campaign organizers are among the lowest in the domain. While most nonprofits run their crowdfunding campaigns on the site on their own, Mightycause offers marketing, CRM and donor management support for $99.
Mightycause success story
: High-Five for Heiman-Patterson, a crowdfunding campaign organized by Francie Fitzgerald, sought to support the work of Dr. Terry Heiman-Patterson and her ALS Hope Foundation. The goal of the campaign was to collect $10,000 over five days while Francie was undergoing treatment for her own illness. A total of $13,880 was raised from 120 donors in two weeks, and the campaign ended up being widely shared.
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SeedInvest Technology
Designed for startups and new entrepreneurs seeking to further their dreams, SeedInvest debuted in 2012 and has helped about 250 companies in their early or initial rounds of funding. With over 600,000 investors and more than $350 million in funding raised, the platform is effective at helping entrepreneurs to get a leg up. After clearing SeedInvest’s intense vetting and due diligence process, for most companies raising capital, the live campaign runs for 45 days.
SeedInvest success story
: NowRx, a technology-driven pharmacy startup based in California that provides free same-day delivery, raised more than $20 million in one of SeedInvest’s largest-ever crowdfunded rounds. This brought the company’s total funding to an estimated $30 million and conferred a post-money valuation of $85 million, CEO Cary Breese told Crunchbase.
StartEngine
Launched in 2014 by Ron Miller and Howard Marks with Kevin O’Leary of “Shark Tank” as strategic adviser, StartEngine acts as both a crowdfunding and an investing platform in exchange for equity or company ownership. Backers can invest for as little as $100. Over 500 offerings have been successfully funded on StartEngine, which states it has a community of over 760,000 investors who’ve made in excess of 500,000 investments to date.
StartEngine success story
: Boxabl, a mass-production, modular house building system, at the time of publication had raised over $11 million toward its goal of raising $68.5 million. At 80 cents per share, Boxabl requires a $1,000 investment to obtain minimum equity in the firm. Boxabl is valued at over $3 billion and has already started production, with the U.S. Department of Defense as a major customer.
Patreon
A crowdfunded platform for creators and artists looking for backers or “patrons,” Patreon debuted in 2013, the brainchild of co-founders Jack Conte and Sam Yam. Supporters pledge monthly donations toward projects and receive access to exclusive content and benefits in return. The platform has brought in more than $2 billion to date and offers multiple plans for member artists, giving them and their patrons flexibility in terms of how they can help each other.
Patreon success story
: True crime comedy podcast True Crime Obsessed, behind wildly popular podcast series such as “The Jinx,” “Making a Murderer” and “The Staircase,” offers four subscription levels and reels in about 46,700 subscribers monthly at the time of publication. While earnings are not disclosed, we can make a rough estimate based on “Chapo Trap House” on Patreon, which reported earnings of $159,000 from 35,914 subscribers.
GoFundMe
Launched in 2010 and a highly versatile yet simple platform on which individuals and nonprofits raise funds for a plethora of undertakings, the GoFundMe community has made over 120 million donations and raised $9 billion for people and causes. The platform charges nominal fund handling and transaction fees but doesn’t charge a platform fee, meaning it is free to start a campaign.
GoFundMe success story
: One of its most popular projects ever has been America’s Food Fund, started by Leonardo DiCaprio and Laurene Powell Jobs, which has collected in excess of $45 million for the Islamic Relief USA, World Central Kitchen and more. This GoFundMe campaign in particular shows the impact of a celebrity in showcasing a cause.
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