The world is changing. That means you have more and better options when it comes to funding your small business. Crowdfunding continues to grow each year, putting the opportunity to fund businesses we’re passionate about into everyone’s hands.
It’s a great option for many small businesses, but there are so many platforms out there. How do you know which one to choose?
We’ve compared three of the biggest crowdfunding platforms to help you pick the right option for you and your business:
- Kickstarter: a platform that focuses on creative projects like art, music, film, etc. Funding is all or nothing and fees are fairly reasonable.
- GoFundMe: a crowdfunding platform designed for individuals and personal causes. No all or nothing requirement and reasonable fees
- Indiegogo: a unique platform that accommodates many, diverse campaigns. No all or nothing requirement, but fees can be higher.
When comparing each platform, it's essential to keep your industry in mind, in addition to what sort of plan to receive funds you're comfortable with. We explain more below.
Plans and Pricing
Kickstarter is a crowdfunding platform that’s heavily focused on catering to creative projects like art, music, film, technology, etc. The site boasts higher pledges to date than every other major crowdfunding platform combined. While it’s hard to argue with that kind of success, only about 65% of projects on Kickstarter get fully funded within the campaign timeline.
Funding on Kickstarter is all or nothing. That means if you don’t reach your funding goal within the designated timeline, you won’t receive any of the funds that were pledged to your project. Kickstarter views this as a benefit – oftentimes backers still expect full results on a project even if it isn’t fully funded. All or nothing funding alleviates the pressure and unrealistic expectations this sets upon the project creators. There are also no fees if your campaign is unsuccessful.
GoFundMe’s crowdfunding platform is super welcoming to individuals and personal causes. Campaigns to fund life events like education, medical treatment, and sports teams are prevalent on the site. The platform itself doesn’t have the independent community that some other crowdfunding sites have, but campaigns are extremely shareable, which can make up for the lack of community.
Funding on GoFundMe is not all or nothing. That means you keep whatever money you raise regardless of whether or not you reach your designated funding goal. Unlike some other crowdfunding sites, fees are the same whether you get fully or partially funded. Keep in mind that this may lead to donors expecting 100% results even if you get less than 100% funded.
Indiegogo is a crowdfunding platform that doesn’t specialize in any type of campaign. All kinds of projects are accepted for fundraising on the site. That means the regulations about who’s on the site are very lax, which can be good or it can mean lots of competition for the attention of donors. Campaigns on Indiegogo have a lower average funds raised than some other crowdfunding sites, but its diverse base is a huge plus.
Indiegogo is unique in that you, the campaign owner, can choose whether or not to go with all or nothing funding. With two plans (Flexible and Fixed), users can decide how this works. However, if you elect to go with the Flexible Funding plan (keep whatever you raise), you’ll be paying fees regardless of whether you reach your goal or not.
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| All or nothing? | Yes | Yes & No | No |
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| Best for | Creative projects like art, music, film, technology, etc. | Personal causes and life-events (e.g. education, medical treatment, sports teams, etc.) | Campaigns across a wide variety of industries with lower funding goals |
Reviews
If you’re an artist, writer, designer, or performer, Kickstarter is a great option to crowdfund your project. Whether or not you choose the site will depend on how you feel about all or nothing funding. It’s a big factor, but Kickstarter is also a huge platform for your campaign and carries a high likelihood of success. If you’re confident in your pitch and believe your creative project will speak to people, Kickstarter may be for you.
GoFundMe is great for personal causes and life events. However, because there’s no existing community on the site, it’s likely that donors will only be your friends, family, and personal network. Depending on how much money you’re looking to raise – and how confident you are in marketing your campaign – GoFundMe is a perfectly adequate option for fundraising your campaign.
Indiegogo is a good option if your project doesn’t fall into the specific categories that other crowdfunding sites cater to. Without the high traffic and brand recognition of a big name platform, you’re likely to raise less money on Indiegogo, so if your funding goals are relatively low, it may be for you. The site is also great for nonprofits because of the flexibility with tax-deductible campaigns.
All three platforms allow you to raise money without taking on debt or giving up equity. There's also a social aspect of fundraising which can help you gauge market interest if successful. You will, however, have to pay taxes on any funds you receive on any of the platforms.
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| App | Yes (for backers) | Yes | Yes |
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What are customers saying?
“I liked showing the world our product and am glad that we are funded. I would recommend Kickstarter to anyone who is wanting to launch a product, but stress the importance of preparation.”
“I tried using another crowdfunding site a few years ago and it was a total loss. I found this site to be easy to use, and fairly successful. It is up to the person trying to raise money for a cause to make it work.”
“Indiegogo can work well, if you aggressively solicit your friends and social network for money.”
More Options:
RocketHub
- Simple educational resources to help you along the way
- Opportunity for a TV spot on A&E
- 4% commission free plus 4% credit card handling fee (if you reach your goals)
Razoo
- Nonprofit and charity focused
- Allows you to collaborate and fundraise as a team
- 4.9% platform fee and 2% + 30¢ payment fee
Fundify
- Focused on startups
- Get connected with an industry veteran to help you succeed
- No fees for the startup or the investor
