(+971) 8007 4267
(+91) 946 340 7140
(+1) 628 432 4305
Have you ever wondered how small businesses gather the capital to start their business? It is often with the help of the best crowdfunding platforms. Let us dig deeper to know more about it.
Maximum businesses raise funds for their commencement. The proprietors go to the investors and detail the business ideas to them. The investors who think that the idea is worth investing in contribute their funds to the business. The businesses, in return, give them shares in profit.
But in this process, there are chances that the investors do not like the idea. And the businesses have no choice but to rely on a handful of investors. If the businesses share their idea socially with a large number of people, there may be a few who are interested in the business idea.
This is actually the concept behind crowdfunding. Let us break the word down to understand better. Reaching out to the crowd (that is, a large mass of people) to get funding (capital or investment for business) is called crowdfunding. Here, the people share their business ideas with a large group of people. Those people may contribute a small amount of money that is clubbed together into huge investments. Let us study the best platforms for businesses in detail in this blog.
What Is Crowdfunding?
Crowdfunding is a method to raise capital through the internet by using social media platforms and crowdfunding platforms. The accumulated funds that are gathered from every small investment of the people contribute to start-up capital. The fundraisers get the equity shares of the company as a reward for their investment. Only in donation apps for crowdfunding, there is no return on investment.
How Does Crowdfunding Work?
It is pretty clear from the above explanation what crowdfunding actually is. Now let us look into its working.
Crowdfunding focuses on three major parts:
1. Goal – How much investment is required for the business?
This is the amount of money that a business needs to raise. The goal should be realistic and achievable. It’s important to account for all potential costs and expenses to ensure that the goal is sufficient to cover the needs of the business.
2. Incentives – What benefit will be given to the fundraisers?
These are the rewards or benefits that backers receive in exchange for their contributions. Incentives can vary widely depending on the type of crowdfunding campaign. For example, in reward-based crowdfunding, backers might receive a product or service that the business plans to offer. In equity-based crowdfunding, backers receive a stake in the company.
3. Timeline – In what time frame can the fundraisers expect some benefit?
This is the timeframe within which the crowdfunding campaign aims to reach its goal. It’s also the period within which backers can expect to receive their incentives. The timeline should be realistic and allow enough time for the campaign to gain traction.
To succeed in the crowdfunding campaign, you need three aspects:
1. The entrepreneur or the campaign initiator who brings the idea.
This is the person or team with the business idea. They are responsible for setting the goal, creating the campaign, offering incentives, and promoting the campaign.
2. The backers of the concept or the fundraisers.
These are the individuals who support the campaign by contributing funds. They are motivated by the incentives offered and the desire to support the business idea.
3. A platform from where you can reach the fundraisers.
This is the online site or service where the crowdfunding campaign is hosted. The platform helps the campaign reach a wide audience and provides tools for managing and promoting the campaign.
Market Insight For Crowdfunding Platform
In the finance world, crowdfunding is set to grow big, with a projected global market size of 3.62 billion USD by 2030. In the United States and Canada together, people are really getting into crowdfunding, contributing a whopping 73.93 billion USD. One amazing part of this whole scene is the money raised globally through equity-based crowdfunding, hitting a solid 4.41 billion USD. These numbers show that crowdfunding is not just a trend; it’s a big deal, making waves both close to home and around the world. As more folks realize how powerful crowdfunding can be, these insights highlight its impact on how we do money stuff nowadays.
According to another report, the anticipated growth of the Crowdfunding Market indicates a rise from USD 1.30 billion in 2023 to a projected USD 2.69 billion by 2028, reflecting a robust Compound Annual Growth Rate (CAGR) of 15.70% throughout the forecast period spanning from 2023 to 2028.
Why Must Business Spend On The Crowdfunding Platform?
One avenue that holds transformative potential for businesses of all sizes is investing in the development of a crowdfunding platform. Here are some compelling reasons why your business should consider the development of a crowdfunding platform:
1. Break Free from Funding Constraints
Crowdfunding platforms liberate you from the constraints of conventional funding sources, opening the doors to a vast array of potential investors. Whether you’re a startup with audacious dreams or a small business seeking expansion, crowdfunding provides the liberation your financial strategy deserves.
2. Smart, Risk-Reducing Market Insights
The development of a crowdfunding platform isn’t just about funds; it’s a strategic move to gather real-time market insights. Launching a campaign allows you to test the waters, validate your product or service ideas, and refine your approach based on actual user feedback. This isn’t just risk mitigation; it’s smart, informed decision-making that paves the way for success.
3. Transformative Marketing Powerhouse
Think of crowdfunding as more than just a means to an end; it’s a marketing powerhouse waiting to be unleashed. A well-executed crowdfunding campaign doesn’t just secure funds; it generates buzz, captures media attention, and propels your brand into the limelight. This dual impact on funding and marketing is a game-changer, propelling your business to new heights.
4. Efficiency Redefined
Time is money, and crowdfunding understands that better than most. Compared to traditional fundraising methods, crowdfunding is a beacon of efficiency. The streamlined processes and rapid traction can fast-track your fundraising efforts. For businesses with time-sensitive projects or ambitious timelines, crowdfunding is the catalyst that redefines efficiency.
5. Community Bonds
Investing in a crowdfunding platform isn’t just about transactions; it’s about building a community. Backers become stakeholders, emotionally invested in your success. This engaged community morphs into a force of brand advocates, amplifying your reach and influence. The result? A community-driven growth trajectory that conventional financing methods can only dream of.
6. Simplify Communication, Amplify Transparency
The development of a crowdfunding platform centralizes your communication efforts, providing a hub for seamless interaction with investors. It simplifies updates, enhances transparency, and fosters a sense of trust. It’s not just about raising funds; it’s about building lasting relationships with those who believe in your vision.
Must-Have Features Of Platforms For Crowdfunding
1. Payment Gateway
To ensure easy and secure payments in multiple currencies, it is important to have a secured payment platform. Although the worldwide accepted currency for crowdfunding is USD, there must still be an option to configure the relevancy of the crowdfunding software with other currencies. Be of the opinion to add other common currencies like Yuan, Yen, Rupees, Euros, Australian Dollars, Singapore Dollars, Canadian dollars, Pounds, etc.
The more currencies you integrate into your payment gateway, the more social outreach it will have.
2. User-Centric Application
There are many crowdfunding applications available on the internet these days. Most of them are flexible and can be customized according to the user. The more user-friendly the application is, the more it will be used. A clean design and quick signup contribute to making an application user-friendly.
3. Progress Meter
A progress meter is important to keep track of the campaign progress. A visual representation can be a really powerful tool to show the campaign’s progress. People find it interesting to complete the tasks.
4. Expanding Your Reach
Social Networking is important to expand the outreach of the application. As the name suggests, crowdfunding applications are useless without a crowd. Getting the crowd is not a difficult task, but getting the right crowd who would show interest in your business, is a real challenge.
10 Best Crowdfunding Platforms
These platforms support startups, non-profit causes, and other personal needs by engaging the community. Let us take a look at a few of the best platforms.
1. Kickstarter
The most famous name in the crowdfunding industry is Kickstarter. It has supported various innovative ideas since 2009. Kickstarter has funded more than 233,626 projects, including games, movies, products, etc.
You can create a free campaign on Kickstarter. You can begin by setting your goals and timeframe. After 14 days, you will get your amount. However, you have to pay platform fees and third-party processing charges. Kickstarter is an all-or-nothing platform. It means you either get the funding you set in the campaign or lose everything on falling short.
Kickstarter enables you to offer rewards to your backers. Backers are people who invest in your idea. You can provide them with an incentive-based gift system, where the more money they pledge, the better reward gets unlocked.
The app connects you with like-minded people. You can save your favorites, get reminders, and stay updated about your backed projects. You can pitch your campaign only if it gets approved.
| Platform Fees | 5% plus 3% – 5% processing fees |
| Price | Free |
| Ratings | 4.1 Android / 4.8 iOS |
| CEO | Aziz Hasan |
| Downloads | 1 Million+ |
2. GoFundMe
GoFundMe is an online crowdfunding and fundraising platform that enables you to collect donations for your cause. It has no platform fees but a small percentage of transactional charges – 2.9% plus $0.30 per donation. People have raised more than $15 billion for personal or business purposes.
You can keep whatever amount you raise, be it higher or lower than the goal. Because it allows donations, people usually provide charity to trusted or close sources. It makes money-raising through the platform a little challenging. It is better for emergency or medical service causes.
| Platform Fees | Free (2.9% processing fees and $0.30 for every donation) |
| Price | Free |
| Ratings | 4 Android / 4.5 iOS |
| CEO | Tim Cadogan |
| Downloads | 1 Million + |
3. Patreon
Patreon is a unique crowdfunding platform that explicitly targets artists, musicians, podcasts, bloggers, and creators. Instead of crowdfunding, it works on subscriptions. It eliminates the need to create limited-time campaigns. Rather, it focuses on building a loyal base and getting recurring revenue through paid memberships.
Regular creators can benefit significantly as subscribers can cancel anytime. Creators can keep them engaged by offering behind-the-scenes or exclusive content.
| Platform Fees | Three-tier model 5% (lite), 8% (Pro), 12% (premium) on monthly earned income plus processing fees |
| Price | Free |
| Ratings | 4.4 Android / 4.7 iOS |
| CEO | Jack Conte |
| Downloads | 5 Million + |
4. Crowdfunder (Shopify App)
If you have a Shopify store and need crowdfunding for a new product through your website, the Crowdfunder Shopify app is a perfect fit. You can set money or quantity goals to raise and check the progress on the crowdfunding page itself. Also, customization and changes can occur after goal-setting.
You can use the platform in three ways:
- Offer pre-orders to gauge demand
- Raise donations for a cause or charity
- Launch limited special editions of the best-selling products
| Platform Fees | $29 monthly (without Shopify subscription) |
| Price | Paid |
| Ratings | 4.9 in Shopify App Store |
| Funded Store owners | 2330 |
| Campaigns | 7600 |
5. Wefunder
With Wefunder, you can raise investment from $50,000 to $50 million. You can be a brewery, restaurant, tech startup, or fashion business. More than 150,000 investors are available on the app. In fact, the Wefunder has funded over $10 million in startups.
You can create a free account and start raising money within fifteen minutes. It can take anywhere between one to three months to accomplish your goal for the venture. There are no management or transaction fees. Administrative costs cover the operational expenses of Wefunder.
The minimum investment size is $100. The app connects young aspirants to qualified and experienced professionals to benefit from their wisdom.
| Platform Fees | Only administrative charges (no processing or transactional fees) |
| Price | Free |
| Ratings | 3.3 in both iOS and Android |
| CEO | Russell Smith |
| Downloads | 1000 + |
6. Fundly
Fundly is an online platform enabling users to raise money for a cause. It has supported around 30,000+ non-profit and volunteer organizations. From 2010 onwards, the site has seen success with over 50,000 campaigns, collectively raising more than $325 million. Moreover, it allows startups, politicians, sports teams, trips, etc., to raise money.
The application enables fundraisers to manage campaigns, post pictures, check to-do lists, synchronize movements in real-time with webpage, etc. Managers can send personalized messages, emails, appreciation notes, appeal letters, etc., to the donors.
You do not need to reach the goal to keep the money. Withdrawal or transfer arrangements are possible within 48 hours.
| Platform Fees | 4.9% plus 2.9% credit card processing fees and $0.30 per transaction |
| Price | Free |
| Ratings | 3.8 in iOS |
| CEO | Dennis Hu |
| Downloads | 1000 + |
7. Indiegogo
Indiegogo provides a unique platform for startups, artists, and non-profit organizations to raise funds. It allows you two options: either an all-or-nothing fixed funding goal like Kickstarter or flexible funding to receive whatever you get.
Indiegogo’s equity crowdfunding in the US enables startups to attract potential investors. Nearly 1.5 million people have benefitted up to the US $2.5 million for their projects. The platform has facilitated more than 800,000 campaigns and has successfully raised over $1.6 billion. Moreover, Indiegogo in-demand lets you raise money even after the campaign ends.
It has both live crowdfunding campaigns and a marketplace for your innovative products. An additional advantage is that you get word-of-mouth benefits as people that follow you spread the word around.
| Platform Fees | 5% |
| Price | Free |
| Ratings | 4 Website |
| Funded | 800,000 + creative ideas |
| CEO | Andy Yang |
8. Crowdsupply
Crowdsupply is a platform that aims to bring useful, original, and respectful hardware to life. At the time software firms are peaking, Crowdsupply is touching the hardware and electronics market. It has successfully helped launch 70% of the projects with an average of $66,000 in funding.
The platform empowers product creators to come to the forefront and launch their products. It follows an all-or-nothing model, meaning if you don’t receive the total amount, you won’t get a penny, and the money won’t get debited from backers’ accounts.
Crowdsupply receives your submission form describing the project. It secures both backers’ and product creators’ rights.
| Platform Fees | 5% Standard plan without processing fees (6-15% for custom plans) |
| Price | Free |
| Ratings | 3 |
| Total Funding Amount | $1.5 Million |
| CEO | Josh Lifton |
9. Crowdfunder
Crowdfunder is an equity crowdfunding platform. It helps raise capital through a crowd of accredited investors. It supports and finances high-potential businesses through a network comprising more than 130,000 entrepreneurs and investors. Crowdfunder, along with its VC Index Fund, offers a chance for direct online investment in individual ventures. The company asserts having a community consisting of 12,000 individual and institutional investors.
You do not need to pay a platform fee. Instead, there are monthly plans suitable to your needs. It is ideal for startups who have received validation to an extent and are on a roll to grow. Startup owners can create deals for equity, debt, convertible note, or revenue share.
It is not a reward-based model and provides investors and entrepreneurs with a more formal approach towards funding.
| Platform Fees | Plans begin at $299 monthly. You get to create a public profile and a ‘deal room’ for investors. It also allows you to establish a non-public profile and a free deal room. |
| Price | Paid |
| Ratings | 3.5 Website |
| CEO | Phil Geraghty |
| Total Funded Amount | $5 Million |
10. Chuffed
Chuffed supports social cause organizations that help animals, the community, or the environment. In terms of financial specifics, the highest-grossing campaign on Chuffed amassed $345,000, while the majority of successful campaigns typically achieve an average of $7,000. They have organized nearly 7,000 campaigns and collected $20 million.
Chuffed allows users to pay platform fees only if they had a good experience. Otherwise, they can keep the total amount. It enables you to launch a campaign for any social cause- education, health, social welfare, environment, international development, etc. It also includes peer-to-peer fundraising to set up an event, create a fundraising page, accept donations globally, and integrate with social media platforms for a boost.
| Platform Fees | Optional payment for processing fees. Donations to Chuffed are encouraged. |
| Price | Free |
| Ratings | 4.7 Website |
| CEO | Prashan Paramanthan |
| Fund | $1 Million + |
How To Choose The Best Crowdfunding Platform?
Starting a crowdfunding journey can be both thrilling and challenging, and picking the right platform is a crucial first step. To ensure success, it’s important to look beyond the surface and examine the key services provided by crowdfunding sites. In this guide, we’ll explore the detailed elements that distinguish platforms, helping you make an informed decision tailored to your fundraising needs.
1. User-Friendly Interface
Using the crowdfunding platform should be an easy experience. Choose platforms with an intuitive and user-friendly interface. How easily you can convey your cause is significantly impacted by the platform’s ease of use. Look for features that make the fundraising process simple for both organizers and donors. A user-friendly platform enhances engagement and ensures a smooth journey from start to finish.
2. Strong Customer Support
Reliable customer support is crucial. Choose a platform that offers various support channels, such as email, live chat, and a phone helpline. Your donors may have questions, and a responsive support team reflects the platform’s commitment to user satisfaction. Choose a crowdfunding site that values transparency and accountability and readily assists both organizers and donors throughout the fundraising campaign.
3. Amplifying Your Reach
Social networking tools are vital for the success of your crowdfunding campaign. Evaluate the platform’s tools for spreading awareness within your community. The best crowdfunding websites seamlessly integrate with popular social media platforms like Facebook and Instagram. Email-sharing capabilities and other promotional features contribute to expanding your campaign’s reach. The ability to effortlessly connect with your social network is a key factor in a platform’s effectiveness.
4. Clear Fee Structures
Understanding the fee structure is crucial for effective fundraising planning. Be vigilant about platform fees, which typically range from 5% to 12%. Some platforms may have penalties, penalizing you for not meeting your goal or adopting an all-or-nothing model. Choose a platform with transparent fee policies, ensuring you have a clear understanding of how much of the funds raised will go towards the cause. A careful examination of the fee structures will prevent unwelcome surprises down the fundraising road.
5. Reputation and Trust
The reputation of a crowdfunding platform is crucial. Opt for well-established platforms with a positive brand image. Recognizable names in the industry inspire trust and confidence among potential donors. A platform’s reputation is a testament to its honesty, reliability, and commitment to facilitating successful fundraising campaigns. Prioritize platforms that have a track record of empowering organizers and delivering on their promises.
Build Your Own Crowdfunding Platforms With Idea Usher
The changing times reflect the need to develop accordingly. The platforms address the significant needs of raising finances with a global reach. Idea Usher is a mobile app development solutions provider with a highly proficient team, helping you build the app of your vision.
Developing such an application can be a challenging task. Various security, privacy, and other measures are a must for the protection of all parties. Idea Usher ensures compliance with the regulations. It provides suitable solutions based on your needs and budget.
An application enriched with the necessary features can enhance the user experience. Idea Usher follows a specific procedure and plans for optimal client results.
Final Words
Popular crowdfunding sites are the need of the hour. These sites enable people to solve their or others’ financial problems and connect with people worldwide. Startups, investors, product launches, social causes, and other issues get adequate attention through adequate funding.
Global connections enable creators, artists, musicians, business people, non-profit organizations, etc., to spread their message. Similarly, investors and donors get a reliable platform to work their differences. Idea Usher helps you in creating your own crowdfunding application with unique features, price plans, and user interfaces.
For detailed information, you can visit.
E-mail: [email protected]
Phone Numbers : (+91)9463407140, (+91)8591407140, and (+1)7329624560
FAQ
1. How Much Does It Cost To Develop a Crowdfunding Application?
Crowdfunding application development costs depend upon the technicalities that are to be included in the app. It varies with customizations and features that are added to the app.
2. What Is The Estimated Cost To Develop a Crowdfunding Application?
Crowdfunding applications usually take up from 45 days to 90 days, depending upon the features.
3. What Are The Factors You Must Consider In Developing a Crowdfunding App?
While developing a crowdfunding platform, you must consider the following factors:
- Its growth trend in the market
- Adequate research to find where the existing applications lack
- Your budget
4. What Are The Types Of Crowdfunding Apps?
You can develop a crowdfunding application of the following type:
- Donation-based applications
- Debt-based apps
- Reward-based applications
- Equity-based apps
5. List The Monetization Models For The Crowdfunding Platforms.
Earning revenue through a crowdfunding platform is possible through the following models:
- Membership fee
- Success Fee
- Ads and promotion
- Loan processing fees
- Part of future sales
