Crowdfunding is an innovative way of raising funds for a project, business or cause by asking supporters to donate money through a specific platform. With the advancements in technology, crowdfunding and peer-to-peer (P2P) fundraising have become a popular way for people to launch creative, personal and social projects, as well as for organizations to engage their communities in their mission. Although there are a lot of advantages to using crowdfunding, it’s important to select the right crowdfunding platform if you want your campaign to be successful. To make things easier for those looking to start a crowdfunding campaign, this article will focus on the top 4 crowdfunding platforms and the features that make them so successful.
1. Kickstarter
Kickstarter is one of the most popular and successful crowdfunding platforms. Launched in 2009, it has since raised over $4.3 billion for different projects and is the leader in crowdfunding. One of the biggest advantages of using Kickstarter is that it’s relatively easy to use and you don’t need to be an expert in order to launch a successful campaign. You can create a project page from scratch and customize it with text, images, videos and other elements. Backers are then able to pledge money towards your campaign and if you reach your goal, you will then receive the money.
The biggest benefit of using Kickstarter though is its all-or-nothing approach to fundraising. If you don’t reach your goal within your chosen timeframe, no money is transferred and all pledges are refunded. This prevents you from incurring any debt if your campaign doesn’t reach its goal but also motivates people to support as quickly as possible. Kickstarter also offers a wide range of support tools to help with planning and running your campaign. Lastly, Kickstarter charges a 5% fee and 3-5% transaction fee while its payment processor charges additional fees.
2. Indiegogo
Indiegogo is another well-known crowdfunding platform, launched in 2008. It is one of the oldest and most successful platforms and has disrupted traditional venture capital investment. It is similar to Kickstarter in that it allows users to launch a campaign and collect donations. However, it differs in that it offers both “all-or-nothing” and “flexible” campaigns. “All-or-nothing” campaigns require you to reach your goal and you don’t receive any of the money if you don’t. “Flexible” campaigns allow you to keep any amount of money that has already been donated to your campaign, regardless of whether of not you reach your goal.
One of the biggest advantages of Indiegogo is that it has a wide range of tools, such as the Indiegogo Concierge Service and the Indiegogo Marketplace, to help you get your campaign off the ground quickly and easily. Indiegogo also offers a variety of payment options, such as credit card, PayPal, Apple Pay and Google Pay. Lastly, there is a 5% platform fee and a 3% transaction fee.
3. GoFundMe
GoFundMe is another popular crowdfunding platform, launched in 2010. It is one of the largest crowdfunding platforms in the world and has raised over $5 billion for various projects. GoFundMe differs from other platforms in that it is mainly used for personal and charitable causes. It also has an open donation format, meaning that all money raised is directly deposited in the creator’s bank account, regardless of whether they reach their goal.
GoFundMe also has a great range of tools to help with marketing, including a simple donation form that is easy to fill out, tools to optimize your campaigns for social media and analytics tools to track the performance of your campaigns. They also have a team of experts to help with any questions you may have. Lastly, there is no platform fee but GoFundMe does charge a minimum processing fee of 2.9% plus 30 cents per donation.
4. Patreon
Patreon is a relatively new crowdfunding platform, launched in 2013. It is a membership platform that allows content creators to find and connect with their supporters. Creators are able to create content and ask their supporters to pledge a fixed amount of money each month. Patreon then collects and deposits the money into their bank account each month.
Patreon is different from other platforms because of its focus on sustaining revenue rather than a one-time campaign. It also has a wide range of tools to help manage your membership, such as a “backer dashboard”, “pledge manager” and “community manager”. It also has analytics tools to help monitor your progress. Lastly, Patreon charges a 5% platform fee and an additional 2-10% payment processing fee.
Final Thought
There are a lot of advantages to using crowdfunding, and selecting the right platform can be the difference between success and failure. Each platform has their own advantages and disadvantages and selecting the right one will depend on your project. Kickstarter and Indiegogo are great if you are looking to launch a one-time campaign, while GoFundMe is better for personal and charitable causes. Lastly, Patreon is a great platform if you are looking for a more sustainable source of revenue.
No matter what platform you choose, it pays to do your research and make sure you know exactly what you’re getting into before you launch your campaign. With the right platform and a well-thought-out strategy, crowdfunding can be a great way to generate funds for your project, business or cause.
