Crowdfunding has transformed the process of raising money.
Kickstarter is an American public-benefit corporation based in Brooklyn, New York, that maintains a global crowdfunding platform focused on creativity. The company’s stated mission is to “help bring creative projects to life”. In the world of crowdfunding, Kickstarter the tried and tested solution The idea is that those seeking funding give “investors” perks, such as products, T-shirts, or unique experiences, based on their level of investment.
Best Suited To: Kickstarter projects tend to be creative in nature, with projects raising money for items such as a bicycle made from bamboo. Projects for other categories such as food and technology do appear, but majority of projects are related to music, art, crafts, and design.
Don’t Forget: Kickstarter only funds projects, meaning you must have a deliverable, like a tool or a gadget, nothing as nebulous as “hiking in Peru.” And no charitable fund raising.
Small Print: Kickstarter adopts the winner takes all approach. If you don’t raise 100 percent of the goal you set, you get none of it. Kickstarter takes 5 percent of the amount raised, and the payment processor takes another 3 to 5 percent.
Kickstarter has reportedly received more than $1.9 billion in pledges from 9.4 million backers to fund 257,000 creative projects, such as films, music, stage shows, comics, journalism, video games, technology and food-related projects.
GoFundMe is a crowdfunding platform that allows people in some but not all countries to raise money for events ranging from life events such as celebrations and graduations to challenging circumstances like accidents and illnesses. The company is based in San Diego, California.
That said there is a business component to GoFundMe.
Best Suited To: GoFundMe is ideal for local businesses trying to rally a community to help them launch or grow.
Don’t Forget: GoFundMe allows users to create their own website to their fundraising cause, the amount they hope to raise, and upload photos or video. Users share their project with friends, family and anyone else via through integrated social media and email.
Small Print: GoFundMe generates revenue by automatically deducting a 5% fee from each donation users receive. If the user receives no donations, then no charge is made. In addition to the 5% that GoFundMe deducts from each transaction, WePay collects 2.9% and $0.30 from each GoFundMe transaction.
GoFundMe is unique to crowdfunding in that they are not an incentive-based crowdfunding website. Although they do allow projects that are meant to fund other projects for musicians, inventors, and similar causes. The business model is set up to allow for donations to personal causes and life events such as medical bills.
EquityNet is a U.S.-based business crowdfunding platform for startups and mature businesses to raise equity capital from accredited investors. Founded in 2005, the company is headquartered in New York.While Kickstarter and GoFundMe appeal mainly to consumers looking to finance small businesses, EquityNet is focused on investors.
Best Suited For: EquityNet is focused on commercial enterprises. Its target sectors include health care, industrial & manufacturing, biotechnology, and computer hardware and software, among others.
Don’t Forget: EquityNet is not a registered broker-dealer and thus is not involved in the transfer of funds.
Small Print: Unlike other crowdfunding sites, EquityNet doesn’t charge a fee for raising funds. It operates as a subscription service. Some services are free, while others are bundled into the $109-per-month plan.
EquityNet provides access to thousands of investors and has helped entrepreneurs across North America raise more than $240 million in equity, debt, and royalty-based capital
Indiegogo, is an international crowdfunding website headquartered in San Francisco, California. The site is one of the first sites to offer crowd funding. Indiegogo allows people to solicit funds for an idea, charity, or start-up business. The site runs on a rewards-based system, meaning donors, investors, or customers who are willing help to fund a project or product can donate and receive a gift, rather than an equity stake in the company.
Best Suited To: Indiegogo is a pretty diverse crowdfunding site, with no specific sector focus.
Don’t Forget: Indiegogo does not use the “all or nothing” requirement, but it does charge a higher fee if you don’t reach your fund raising goal.
Small Print: Indiegogo offers both fixed and flexible funding. The fee for either is 4 percent, but if you don’t hit your funding goal with a flexible funding campaign, the fee is 9 percent. There’s no fee for a fixed funding campaign if you don’t hit your funding goal.This charge is in addition to credit card and PayPal charges that range from 3.5% to 9%.
Following changes in Security and Exchange Commission rules earlier in 2016, Indiegogo has partnered with MicroVentures to offer equity-based campaigns beginning in November 2016, allowing unaccredited investors to participate with equity stakes
RocketHub is an online crowdfunding platform. Very popular with musicians, entrepreneurs, scientists, game developers and fashion designers. RocketHub is considered one of America’s largest crowdfunding platforms.
Best Suited To: RocketHub is ideal for projects related to; art, business, science, and social issues.
Small Print: If the selected funding target is not reached by the deadline, the project leader is still able to keep the collected funds. RocketHub charges 4% of funds collected, plus 4% payment processing fees, if the project is fully funded, and 8% plus 4% payment processing fees if the project does not reach its goal.
RocketHub engaged in an innovative partnership with marketing agency Wieden+Kennedy and Chrysler’s Dodge Dart in 2013 allowing users to crowdfund the purchase of a car by asking friend sand family to buy certain parts, such as wheels.
Crowdfunder is a Los Angeles-based equity crowdfunding platform that connects entrepreneurs to investors onlineCrowdfunder aims to provide investors with the chance to get in on investment opportunities that have typically been exclusive to Silicon Valley venture capitalists or industry insiders. In addition to connecting entrepreneurs with investors, the site also offers a lot of resources to help investors raise money.
Best Suited To: Because Crowdfunder attracts accredited investors, the fundraising goals tend to be higher. Organizations in industries like high-technology and health care can raise hundreds of thousands or even millions of dollars. It’s also a cool place to find innovative ideas like a notary service that can be conducted via online video.
Small Print: You pay no fee to get your funding, but you do have to pay a monthly subscription service fee.
Since 2011, Crowdfunder has funded 58 deals, averaging $1.8 million apiece. The majority of those are tech startups, but others are social enterprises and small businesses. To date, $100 million in investment deal flow has come through Crowdfunder.
First published by Adrian G Stewart at OOKII.Company