Have you finally decided to launch your business this 2024?
If yes, then you're definitely a risk-taker. As we all know, running a business today and in the upcoming years won't be easy.
Here are some stats to support my claim:
According to the BLS, 20% of businesses fail within the first year.
Those businesses fail because of a lack of capital or funding.
As an example, let's look at Compaq.
Compaq was the largest supplier of PCs during the ’90s. Their systems gained popularity because of better graphics and affordable prices.
Having the best engineers onboard gave Compaq an edge over its competitors. The company even hit the $100 m mark in its second year.
But what happened next will surprise you…
The brand closed down with $2 billion in short-term debt twenty years after its founding.
What caused such a progressive brand to end up in such shambles?
I believe that rapid growth is one thing, maintaining it is quite another.
Many businesses fail because they can't balance their growth-resources ratio.
Even if you’re a startup, you’ll need cash to cope with everyday business needs. Business needs such as salaries for your employees, electricity, and maintenance costs.
You don't have to worry if you have a lot of money in your bank account.
In case you don't, we've got a solution...
What Is Crowdfunding?
Have you tried applying for a startup business loan?
If yes, then you know it's a long and tedious process.
You need a business plan before you pitch your idea to funders. You must also submit a feasibility report before applying for any business loan.
Quite tricky, isn't it?
Don’t worry! The only thing you have to do is crowdfund.
Crowdfunding allows you to raise small amounts of money from a number of people which commonly include friends, family, and other individuals.
Let me explain further...
How Does Crowdfunding Work?
We’re all familiar with business loans. Investors, banks, or other funding sources provide them.
Crowdfunding is different. You raise money from a group of people who each contribute a smaller amount to the campaign - $10, $20, or $100.
Once you get many donors for your campaign, you have a decent amount of money on hand.
But as they say, not all that glitters is gold. Like anything else in the world, crowdfunding has its pros and cons.
✔ Lower financial risk
✔ You can build your community
✔ You don’t have to give away any equity
╳ It takes a lot of time and money to build a successful campaign
╳ Anyone can steal your campaign idea
╳ You have to pay fees (Kickstarter crowdfunding, for example)
╳ Crowdfunding is not for everyone
Now you clearly understand crowdfunding, how it works, and its benefits and drawbacks.
So, what’s next?
Let's see which type of crowdfunding works best for you.
Types Of Crowdfunding
Even if you buy donuts, you could choose from various flavors.
Crowdfunding is also like that. There are also a variety of options available.
Here are some popular crowdfunding types:
Donation-Based Crowdfunding: The name says it all. It is a type of crowdfunding you can use to collect donations offering nothing in return.
Rewards-Based Crowdfunding: This type works more or less the same as donation-based crowdfunding. The only difference is you need to offer tiers of rewards to your investor.
Equity-based crowdfunding: This type of crowdfunding allows you to sell shares of your company to investors.
Debt-Based Crowdfunding: You can get an outrageous amount of funding without giving away a share in your business.
Royalty-Based Crowdfunding: If a project is successful, the owner will pay a royalty.
The Top Crowdfunding Sites That Will Help You Raise Capital In 2024
Would you like to crowdfund your business? How can you go about it?
Here’s the list of the best crowdfunding platforms you can use to raise money for your business:
Indiegogo is another top crowdfunding site that supports tech, creative, and community projects.
This platform comes with a range of unique features.
And the best part is...
You get to choose between fixed (like Kickstarter) or flexible funding.
Flexible funding enables you to get your funds regardless of meeting your goals.
You can also use Indiegogo InDemand to raise money after your campaign ends.
Remember BodyBoss? They moved to Indiegogo InDemand after getting success with Kickstarter crowdfunding.
Let’s move on to the next.
‘Causes’ is amazing if you’re looking for an all-in-one crowdfunding solution. You can use their crowdfunding page to collect funds and donations.
This crowdfunding site is not only good for fundraising. But you can also use it to find like-minded people.
There are over 186 million Causes users worldwide. This is the best crowdfunding platform for nonprofits. Those who want to make an impact faster should try it.
Another option you can try is...
Patreon is an easy-to-use equity crowdfunding platform. It is perfect for artists and creative geniuses.
Famous YouTube musician Jack Conte launched this platform in 2013. To date, Patreon has helped over 200k professionals collect funds.
Artists can also build relationships with their followers using Patreon.
You can start using Patreon for free. But you have to pay the monthly subscription fees based on the plan you choose.
The only downside is this platform doesn’t promote artists as much as Indiegogo or Kickstarter does.
You may also try...
Crowdfunder is for you if you have a Shopify store and you want to crowdfund it.
What we loved about this app is you can convert your product page into your crowdfunding page.
Interesting, isn’t it?
You can set goals and see your campaign achieve them through a progress bar.
Priced at $24, this app is a perfect tool to test product ideas and raise capital.
Now, we have...
It's the option you've been waiting for, isn't it?
We have all heard great things about this crowdfunding platform.
It wouldn't be wrong to say it's one of the best crowdfunding platforms out there.
GoFundMe is an ideal solution for personal fundraising. For example, you can set up a GoFundMe page if you want to raise money for your healthcare expenses.
You can also launch a campaign if you want to support your local business.
The GoFundMe platform is easy to use.
Follow these steps to set up your GoFundMepage:
- Specify the money you need to raise
- Tell your story
- Now, share your campaign within your social circle
That’s it! You have now created your GoFundMe page.
Here's another crowdfunding platform you can check out.
Are you a startup looking to scale your business?
Why not check out CircleUp?
CircleUp has helped over 256 startups build a consumer brand. The platform offers both equity and debt crowdfunding financing.
With CircleUp, you can connect with industry experts and entrepreneurs. You can also use this crowdfunding platform to gain market insights.
Fundable is for you if you’re a small business looking to raise capital.
It allows small businesses to raise money through rewards or equity financing.
According to their site, businesses that use equity financing raise more capital.
To make equity financing work, you also need to have a proven track record of success and a solid business plan for your business.
Rewards-based crowdfunding raises less money but more backers.
Sounds good, right?
There are still 2 options left for you. Let's continue.
If you’re a startup looking to get your project off the ground, you can try SeedInvest.
It is the top crowdfunding site with headquarters in New York City. They have funded over 235 companies to date.
Sign up for an account if you want to raise capital through this platform. All you need to do is fill out a form and submit it for approval.
Upon approval, you’ll get an invite to create a profile. Go on and start your fundraising campaign.
SeedInvest will charge you a 7.5% placement fee and a 5% equity fee. Pay this amount after closing your round.
We're down to our last option.
Kickstarter tops our list of best crowdfunding platforms.
Since its launch, the company has funded over 200k tech and creative projects.
It’s a reward-based crowdfunding platform. That means you can offer discounts, rewards, and incentives to your supporters.
The only disadvantage is that you can only use your funds if you meet your initial funding goals. If you fail to raise funds, the funds remain with your funder.
This interview will give you more insight into how to start a Kickstarter campaign. You’re gonna love it.
Up next is...
At number 10, we have Crowdcube, which is a UK-based crowdfunding platform.
Crowdcube offers a few campaigns. But it allows you to enjoy benefits from partner organizations if you achieve your fundraising goals on this platform.
Get ready to pay 7% of the funds raised if you achieve your target. Also, there is a 0.75%-1.25% completion fee. The processing fee varies from project to project.
Get The Money Your Business Needs - Try Crowdfunding!
Crowdfunding is a safe and effective way to raise capital for startups. We have reviewed the top crowdfunding sites for you in this article.
So, which one is the best crowdfunding platform for you?
The answer is…
The one that best fits your business needs ?
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