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These 5 crowdfunding platforms can help turn your big idea into a reality

Posted by Neha De

August 6, 2021    |     4-minute read (995 words)

Digital connectivity has disrupted the business investment industry. It has made the process of raising capital for a business idea, nonprofit cause or personal needs smoother by using online crowdfunding platforms. 

Added to that, in 2012, former President Barack Obama passed the Jumpstart Our Business Startups (JOBS) Act that drastically altered the landscape of crowdfunding platforms. Until then, only a few crowdfunding sites were allowed to operate on a reward or donation basis, by offering a discount, product or enticement in exchange for monetary funding. 

According to recent estimates, to date, more than $34 billion has been raised globally using crowdfunding platforms that offer easy-to-use tools for both fundraisers and their supporters alike.

Using multiple parameters, such as ease of use, charges and user reviews, in this article, we take you through some of the best crowdfunding platforms on the web:

Kickstarter

Kickstarter is the first platform that comes to mind when talking about crowdfunding. The website is particularly known for supporting tech entrepreneurs and creative minds to fund their projects. Since its launch in 2009, the platform had raised more than $6 billion at the time of publication, as well as successfully funded more than 200,000 projects.

Entrepreneurs looking to raise capital through Kickstarter first need to set up their target along with a time frame to complete it. According to its website, Kickstarter is an all-or-nothing funding platform, which means businesses must meet the set goal within the allotted time, otherwise the money gets refunded to the backers. 

The fee for launching a crowdfunding project on the platform is 5% in addition to processing payment charges, which can be anything between 3% and 5% per transaction.

Indiegogo

Founded in 2008, the platform helps “surface innovations in tech, design and much more, all before they go mainstream.” On Indiegogo, entrepreneurs get to choose between two options: fixed and flexible funding. While the fixed finding option works well for campaigns where the project needs a fixed amount of money, the flexible funding option is better for fundraisers where any amount of funding will help the end goal. With the latter option, entrepreneurs get the funds regardless of whether the target has been met; whereas with fixed funding, the funds are returned to donors if the campaign goal has not been met.

Indiegogo charges a 5% platform fee along with a third-party processing fee of 3% to 5%. Additionally, the platform offers tools that allow businesses to integrate with other platforms, such as Facebook and Google, to promote their campaign.

GoFundMe

Even though this platform caters primarily to personal fundraising needs, businesses can use it, too. According to their website, the platform is built on the generosity of individuals around the world and has raised more than $9 billion from more than 120 million donations. 

While GoFundMe does not charge a platform fee, it collects a 2.9% processing fee and 30 cents for every donation. However, the platform comes with a GoFundMe Guarantee, wherein if GoFundMe finds that fundraiser donations have been misused, then donors may be eligible for a refund.

StartEngine

A fairly recent platform, StartEngine was founded by Howard Marks and Ron Miller, along with Shark Tank’s Kevin “Mr Wonderful” O'Leary as a strategic adviser. In essence, StartEngine allows common people to become investors in early-stage startups (in return for equity) for as little as $100. 

StartEngine offers two options for companies looking to raise cash: Regulation Crowdfunding, where entrepreneurs can raise up to $5 million each year, every year through their funding portal, StartEngine Capital LLC; and Regulation A+, where they can raise up to $75 million each year, every year through their broker-dealer, StartEngine Primary LLC. Most enterprises begin with a Regulation Crowdfunding offering (or two) before graduating to a Regulation A+ raise. 

Patreon

Co-founded by YouTube musician Jack Conte in 2013, Patreon offers straightforward fundraising and subscription options for artists and other creators by providing them with the tools they need to acquire, manage and energize their paying fans (called “patrons”). 

The platform works on a subscription-style payment model, where the patrons decide how much to pay their favorite artists every month in exchange for extra content, exclusive access or a deeper look into their creative journey. This model allows creators to retain creative freedom while getting the money they deserve. Patrons’ fees start at 5% and can go up to 12%. 

Inspirational crowdfunding success stories

Take a look at these four crowdfunding campaigns that found massive success: 

Pebble Time: This was the biggest Kickstarter project of all time when it first launched in 2012. And then the company did it again in 2015. At one point, Pebble Time was destined to be the No. 1 brand in smart wearables before it was acquired by Fitbit. Backed by 78,471 sponsors, the campaign raised $20,338,986 against the target of $500,000. 

Bluetti AC200: A solar power station, the Bluetti AC200 raised more than $5 million of its humble $10,000 goal. The device aims to serve as a solar power station that one can take anywhere to power their devices. The designers of the Bluetti AC200 say it’s quieter and more eco-friendly than a standard gas-powered generator, and features a lithium-ion battery that is maintenance-free. 

Kingdom Death: Monster 1.5: This was a game created by Adam Poots, who can be regarded as a serial Kickstarter. This was his third and most-successful attempt to date, and it made him a force among game creators on Kickstarter. Poots set out with a target of $100,000 but managed to raise $12,393,139 from 19,264 backers. 

The Las Vegas Victims Fund: Started by Steve Sisolak, Clark County Commission Chair from Las Vegas, the GoFundMe Las Vegas Victims Fund started with an original goal of $500,000 and managed to raise $11,874,100. The fund was set up to provide relief and financial support to the victims and families of the Las Vegas mass shooting.

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