Crowdfunding has emerged as a popular way for entrepreneurs, creatives, nonprofits, and individuals to raise funds for their projects or businesses. With the rise of crowdfunding, a plethora of platforms have emerged, each with its own unique features and target audiences.
In this blog post, we will compare five top crowdfunding platforms—Kickstarter, Indiegogo, GoFundMe, GiveButter, and Republic.com—to help you choose the best platform for your crowdfunding needs. By the end, you’ll have more information to be able to determine which crowdfunding platform is the best for your project or business.
But first, some basics…
How Crowdfunding Works
Crowdfunding describes a process of funding a project or venture by raising many small amounts of money from a large number of people, typically via the internet. It’s one of many fundraising strategies.
Additional strategies include, among others, equity investment, corporate sponsorship, fiscal sponsorship, and individual donor programs. Crowdfunding is also one of the simplest, most accessible ways to tell your story, package it up, and share it with people, turning a crowd into an engine powering your dream business.
The two main types of crowdfunding are:
- Rewards-based: donors receive a service or product in exchange for a donation
- Equity-based: founders seek private or licensed investors to buy shares in their company or profits
And now that we’ve got some basics out of the way, let’s compare 5 top crowdfunding platforms:
5 Top Crowdfunding Platforms
Kickstarter
Kickstarter is one of the most popular crowdfunding platforms particularly popular among creatives, such as artists, designers, and musicians. It’s a reward-based crowdfunding platform, which means that backers receive a reward or a product in exchange for their contribution.
Projects must meet certain requirements to be accepted, but Kickstarter does a great job guiding creators to success. Keep in mind they have an all-or-nothing funding model, meaning that projects must reach their funding goal before the deadline, or the project receives no funds at all.
Indiegogo
Indiegogo has helped fund over 800,000 projects across 223 countries. They offer both reward-based and equity-based crowdfunding, through their StartEngine equity crowdfunding platform. Backers can either receive a reward for a donation, or invest in the project in exchange for equity. Filmmakers, entrepreneurs and tech startups prefer Indiegogo.
Indiegogo has a flexible funding model, meaning that projects can keep the funds they raise even if they don’t reach their funding goal. They also offer a variety of campaign types, such as fixed funding, flexible funding, and ongoing funding.
GoFundMe
GoFundMe is a popular crowdfunding platform that is particularly popular among individuals and causes. It’s a donation-based platform, meaning that backers do not receive any rewards or products in exchange for their contribution. Instead, backers contribute to the cause or the individual directly.
GoFundMe is particularly popular for medical expenses, memorial funds, and charity causes. You’ve probably seen campaigns go viral for heartbreaking stories, like fundraising for urgent healthcare or funerals. (Humans of New York even helped raise $2.6 million for a former burlesque dancer turned author, Tanqueray!) But we really must stress that if you’re running a rewards-based crowdfunding campaign, GoFundMe is not the right choice.
Givebutter
Givebutter is a newer crowdfunding platform that has gained popularity due to its focus on social fundraising. It’s billed as the world’s first completely free end-to-end fundraising platform. The platform offers features such as team fundraising, donor management, and social media integration.
Givebutter is the go-to for nonprofit organizations, schools, and universities, founded by three George Washington University college friends.
“They had noticed millennials were active in volunteering but lacked representation when it came to donating online. They concluded that the giving experience was too transactional and not enough companies were transparent with fees, thus discouraging would-be donors from lending their financial support to worthy causes.”
So far, Givebutter has helped fund over 20,000 campaigns and has raised over $250 million since its launch in 2016.
Republic
Republic.com (OpenDeal Portal LLC, CRD #283874) is an equity crowdfunding platform that allows individuals to invest in startups and small businesses in exchange for equity. Regulation Crowdfunding enables eligible companies to offer and sell securities through crowdfunding. The SEC rules:
- require all transactions under Regulation Crowdfunding to take place online through an SEC-registered intermediary, either a broker-dealer or a funding portal
- permit a company to raise a maximum aggregate amount of $5 million through crowdfunding offerings in a 12-month period
- limit the amount individual non-accredited investors can invest across all crowdfunding offerings in a 12-month period and
- require disclosure of information in filings with the Commission and to investors and the intermediary facilitating the offering
Republic.com is particularly popular among tech startups, social impact businesses, and real estate projects. Projects must meet certain requirements to be accepted on their platform. And you’ll need a lawyer to complete your SEC filings.
Republic.com has helped fund over 400 campaigns and has raised over $200 million since its launch in 2016. Take a look at some of their most popular campaigns for best practices.
Key Considerations When Choosing a Crowdfunding Platform
Lastly, here are some features you need to consider when choosing the best crowdfunding platform for your business:
- Flexible or fixed funding (eg, Indiegogo In Demand, Kickstarter all or nothing)
- Rewards / equity / nothing in return
- Payment partners (eg, PayPal, Stripe)
- Fees (platform + payment processor)
- Project specs (eg, Indiegogo for film & tech entrepreneurs, Kickstarter for creatives, GoFundMe for humanitarian disasters, Seed & Spark for film)
There are dozens of great crowdfunding sites, and the best crowdfunding platform for your business depends on your needs. So do your research, and choose wisely!
Ready to launch your first crowdfunding campaign? Check out Launch in 5 Days.
