Best Crowdfunding Platforms

Contributor, Benzinga

You’ve probably been hearing the term crowdfunding but do not understand what this interesting word is. Crowdfunding is the use of small amounts of capital from a large group of people to finance a new business. Utilizing some of the best crowdfunding platforms can help your company increase its funding access and even improve social engagement.

Crowdfunding takes advantage of a large network of individuals through crowdfunding websites and social media to pull together entrepreneurs and investors. This is done to increase entrepreneurship by going beyond the relatives, owners and venture capitalists to other people for investment. 

This article looks at the best crowdfunding platforms, how to start one and the benefits you can derive from using one.

What are the Benefits of Using a Crowdfunding Platform?

Crowdfunding is the new goldmine when it comes to the investment world. As you read further, you’ll be learning about the best crowdfunding platforms that have helped turn new ideas into reality. 

Worth reading, right? But first, let’s take a look at some of the benefits of using a crowdfunding platform. 

Beats Traditional Fundraising

Starting a new business venture comes with its share of challenges like  seeking funds from bank loans and convincing traditional investors to invest. The challenges could be overwhelming. 

That’s why using the best crowdfunding platform is beneficial to you as a 21st-century business owner. It allows your message and pitch to reach a large number of people who are willing to invest in your idea and make it a reality. 

It is a fast and sure way to raise funds without any upfront fees. 

Best Place to Build Social Proof and Validation

When you are involved with a highly visible crowdfunding platform, your product can get high validation and social proof. This happens when potential clients or customers show increased interest in your service or product. 

Once a product has a high social validation, it allows you to get good testimonials and solid backing. You can, in turn, use this to convince potential investors, thereby raising enough funds for your projects. 

The best crowdfunding platforms also help you get concrete and honest feedback and expert opinions about your company. You could use a crowdfunding platform to test the public’s opinion about your services, and investors can track your progress as well.

Crowdfunding Serves as an Effective Marketing Platform

Taking advantage of the best crowdfunding platform allows you to boost awareness for your brand or products. When you pitch a business idea or project through this platform, it serves as a good marketing strategy and leads to high media attention. 

When you have considerable press coverage on your brand, many eyes will be on your service. This could be in the form of social media stories, blog articles or recommendations. 

In the end, it leads to your brand capturing the attention of a new interested investor.

What to Look for in the Best Crowdfunding Platforms

What is the best crowdfunding platform and what factors are to be considered when selecting a particular crowdfunding platform for your business idea? 

How can I start a good crowdfunding platform? All these questions and maybe more run through your mind while considering the best option for a crowdfunding platform. 

To clear those doubts, here are some critical factors you should consider when choosing the best crowdfunding platform: 

Fast Processing Speed

When choosing the best crowdfunding platform to raise funds for your business, it is essential to look at the processing speed of the forum. Some platforms like HoneyFund and GoFundMe take an average of 2 to 5 working days, making them among the fastest crowdfunding sites. 

Others may require you to reach a specific goal before making any withdrawal over 14 to 15 working days. Whichever one you go for, you should consider the processing speed you prefer and that suits your product niche before getting started with it.

Multiple Gateway with Support for Multiple Currencies

When going for the best crowdfunding platform, you should consider one with various gateways that supports various currencies. Some platforms do not support payments from particular countries and restrict the use of some currencies.

Before choosing the best crowdfunding platform, check to see whether it has a wide variety of currency options. Go for platforms that use as many gateways as possible, such as Paypal, credit cards and Google Pay. A good platform should also create an avenue for offline payments to be made.

Secure Mobile Options

Using a platform that allows you to manage and set up your crowdfunding campaign on the go is an added advantage. Most crowdfunding platforms have mobile sites but using those with mobile apps tends to be more beneficial. 

Some platforms like GoFundMe and Kickstarter have apps that are highly rated in Google Play and AppleApp Store. Using platforms with secure mobile options allows you to browse through successful projects easily and inspire your creativity. 

Responsive Design

The best crowdfunding platform comes with a reliable, responsive and customer support design. When setting up your crowdfunding campaign, you might encounter some glitches here and there.

Having an excellent responsive system allows your work to be much easier and faster. Being able to reach out to standby support in terms of resources, more information and personal assistance is an added advantage. 

Progress Meter to Track Your Campaign

When choosing the best crowdfunding platform, you should consider one that allows you to track your campaign effortlessly. Investors also take advantage of this tool and monitor your campaign to see whether it is worth investing in. 

These platforms should include tools that facilitate sharing your campaigns on social media and help you keep track of their efficiency.

The Best Crowdfunding Platforms

What is the best crowdfunding platform? This question can be answered after you’ve done your due diligence carefully and adequately. 

When it comes to investment, most people are cautious of where they are putting their money. To help you figure out which is the best crowdfunding platform, here are some platforms that rank top of our list:

Indiegogo

Indiegogo Inc. was founded in 2008 by Danae Ringelmann, Eric Schell and Slava Rubin. This platform has proved its reliability as more than 10 million individuals visit its platform monthly, and about 19,000 campaigns are launched monthly. 

It is available in 235 countries, and it allows you to create a campaign for any idea of your choice. Indiegogo uses tools that make it easy for you to integrate with other social media platforms. 

Pros:

  • Perfect for investors and entrepreneurs
  • Has an A+ rating with Better Business Bureau
  • Operates globally in over 235 territories

Cons:

  • 5% platform fee, including 3rd-party processing fees, might be too high for some users

Best for: Investors and entrepreneurs.

Pricing: You can set your campaign for as long as 60 days for a 5% platform fee and a 3% to 5% 3rd-party processing fee. The process is straightforward, and transactions are transparent. It allows a 15-business-day duration to withdraw your money.

Mightycause

Mightycause came into existence in 2006 and served as a fundraising platform for nonprofits and people raising money online for causes. It stands out as a top platform because of its fundraising flexibility, helping more than 150,000 reasons get the contributions needed for an organization’s goals. 

Pros:

  • Social media integrations
  • No platform fee
  • Good customer support

Cons:

  • Limited means of communication between campaigners and backers

Best for: Nonprofits

Pricing: It offers an average of 1.2% of the money raised via the platform, including $0.29  per transaction. It also has a free starter option for peer-to-peer, annual and event-related campaigns.

SeedInvest

SeedInvest was founded in 2012, with its headquarters located in New York City. It has funded more than 200 companies and made it possible and easy for investors to finance startup ventures. 

Pros:

  • More than 200 startups get funded.
  • It aids in creating awareness among angel investors and venture capitalists.
  • You are not required to pay any fees if your fundraiser is not successful.

Cons:

  • Though many startups go through a rigorous vetting process, only a few of them get selected.

Best for: Startup ventures

Pricing: SeedInvest charges a 7.5% placement fee and an equity fee of 5%. The campaign period takes about 45 days to 6 months. 

GoFundMe

GoFundMe was initiated in 2010 and is now one of the biggest fundraising sites online. It has raised more than $9 billion from over 120 million donations. It is flexible and simple for anyone to use. 

Pros: 

  • It has a 0 platform fee.
  • Allows flexibility to raise funds for charity, family and friends.
  • It has  all-around customer support.

Cons:

  • It includes credit and debit card transaction charges.

Best for: Anyone

Pricing: It charges no platform fee, and its processing fee is 1.9% and 0.30% per transaction. You can raise funds for as long as you want as there are no time restrictions.

StartEngine

StartEngine was founded in 2011 by Howard Marks and Ron Miller. This platform enables individuals to become investors in startups. Its simplistic nature passes it as one of the best crowdfunding platforms as it has helped more than 375 businesses get funds. 

It has a network of more than 300,000 investors. 

Pros:

  • You can invest from as low as $100.
  • It has generated more than $200 million.
  • It has assisted more than 375 businesses.

Cons:

  • It is new.

Best for: Investing

Pricing: There is a 7% charge of whatever you raise on the platform and a 2% equity fee.

Where to go from Here

When starting your business or seeking to finance your existing business, having a list of investors is a huge benefit. What better way is there to get access to these funds than through the best crowdfunding platform?

If you are wondering how to start a crowdfunding platform, you must go through the various factors that make up a perfect platform. Investment doesn’t have to be complicated anymore, and you can gain from investments through these platforms for as little as $100.