18 Best Crowdfunding Sites and Platforms for Startups

Starting a business excites you, but the excitement comes down when you think about funding. But you don’t have to get discouraged or drop your business idea because there are ways you can fund your startup. A business loan can help fund your business idea, but the money may not be enough to cover the overhead costs. 

So, what do you do when you can’t pay a business loan, yet you need more money to grow your business? Ideally, business loans aren’t accessible to everyone, but there are other ways, like crowdfunding, to raise money to start your business. 

Crowdfunding is a popular way to get funding to help start a business. But where and how does crowdfunding happen? There are many crowdfunding platforms where entrepreneurs can raise capital for a good course, such as funding a business. If you’re wondering where to begin with a crowdfunding startup, you’re on the right page, reading the ideal post.  

In this blog, Foundeck helps you understand how crowdfunding works and also presents the 12 best crowdfunding sites and platforms for startups. 

What Is Crowdfunding?

Crowdfunding is raising capital through fundraising on particular platforms; different individuals donate small amounts of money to support a business. Raising money differs from the traditional methods of raising large sums. You raise money from an existing audience or group of personal investors on a crowdfunding platform.

What is a Crowdfunding Platform? Crowdfunding platforms are where people pool resources to fund a project. As the name ‘‘crowd’’ suggests, people use their resources to fund a project. The audience enters a URL and then uses an online payment method to render their support. It’s a business strategy that allows different individuals to partially pay for a business rather than borrow huge sums of money from lending institutions.  

How Do Crowdfunding Sites and Platforms Work? 

Crowdfunding platforms make it possible for transactions to be completed between willing investors and a fundraiser. These platforms work with partners to fundraise by following a specific system that attracts investors daily, and they might offer backers (donors and supporters) incentives for support or donations. These incentives include:

1. Discounts or early access to purchase a product
2. An opportunity to preorder a product and help in developing it
3. Exclusive rewards - Ongoing discounts, free merch, or enhanced customer loyalty 
4. A chance to access the founding team or other crowdfunders
5. Exclusive content
6. Equity

Crowdfunding sites charge transaction and payment processing fees for hosting crowdfunding campaigns. Every crowdfunding site operates differently, but the core idea is the same, with different features, fee structure, and user base. The fundraiser submits their fundraising target and timeline. 

You submit the project with a fundraising target and timeline, then campaign for support. What options do you have for crowdfunding for your business on crowdfunding platforms? Here’s a list of the best crowdfunding websites in 2024.

Types of Crowdfunding for Startups

Crowdfunding isn’t only about raising money; the funding strategy also comes with rewards. You can test new products, gauge the reception of your latest content idea, and trade preorder rights to support the audience. These are the different types of crowdfunding:

1. Equity crowdfunding is about offering online equity securities or shares via a crowdfunding platform. Entrepreneurs looking for flexibility use this method of crowdfunding to raise funds. 
2. Reward-based crowdfunding is when people pledge or give money to an entrepreneur for a product or service at a later stage. The method is used by entrepreneurs launching new products or services to test the market’s response to an idea. 
3. Debt crowdfunding differs from other crowdfunding methods and is seen as a low-risk investment option for the contributor. The repayment schedule and amount of returns are predetermined. As long as the business is operational, the contributor knows what they’ll get in return beforehand. 
4. Donation-based crowdfunding is a way of gathering money for charities and is ideal for nonprofit enterprises. Those who donate for this course don’t expect anything in return, and those organizing the donation make it clear from the beginning. 

Best Crowdfunding Sites for Startups

The decision to crowdfund your business idea is only the beginning, because finding the right platform for your course is a challenge. You must consider your financial needs, startup industry, and eligibility to get the right platform. Fortunately, we have a list of the 12 best crowdfunding sites and platforms for startups you can choose. 

1. Kickstarter

Launched in 2005, Kickstarter is a popular online fundraising platform with a community that has assisted over 250,000 projects in raising funds. The Kickstarter community has raised funds for physical and digital products on this reward-based fundraising platform. 

Fundraisers incentivise backers with exclusive preorder discounts, shoutouts, or gifts to support a project. You can persuade backers to donate more money to your project by offering a tiered reward structure. The higher the backer commits towards your project, the better the rewards will be.

How do projects on Kickstarter get money? Kickstarter campaigns are an all-in affair, meaning fundraisers only access the funds after paying a Kickstarter fee and meeting their fundraising goal. In case the goal falls short, money remains with funders. The projects on Kickstarter are new and high-quality, mostly creative ideas that catch the attention of early adopters and press headlines. 

Backers perceive these projects as more trustworthy because their money is in good hands unless the campaign succeeds. Projects that succeed pay a 5% fee to the platform plus a transaction fee between 3-5%. Here are the advantages and disadvantages of Kickstarter. 

PROS:

1. A massive and active community
2. The all-or-nothing model approach encourages donations.
3. It’s suitable for creative projects.

CONS:

1. You don’t get funds if the goal isn’t met
2. A 5% transaction fee or more
3. Only for new catchy, creative business ideas

2. Indiegogo

Indiegogo is a crowdfunding platform that supports diverse businesses, nonprofits, and artists. The platform is similar to Kickstarter and comes with simple tools and campaign options, but Indiegogo stands out by allowing fundraisers to choose a flexible funding goal. 

The funding goals are flexible, and fundraisers receive funds whether they meet the ultimate goal by the deadline. Its funding flexibility has numerous milestones, and if you can fulfill some of your commitment to backers using some of the raised funding, it allows the fundraiser to work with funds gathered even if you were unable to fund your entire campaign. 

An in-demand feature in Indiegogo allows you to keep your campaign going. You also continue raising funds without a deadline, even if the fundraising campaign timeline is over. It allows for extra funding or fulfillment costs or increasing your audience. You pay a 5% fee for the funds amassed in the campaign and a further 3% transaction fee.

PROS:

1. The funding method offers flexible funding options
2. Supports various projects or businesses
3. Allows ongoing fundraising
4. Ideal for startups looking to reach a global audience

CONS:

1. Charges a 5% fee plus transaction fees
2. Smaller community 
3. A risk of underfunding

3. Fundable

Fundable is a crowdfunding platform that offers equity crowdfunding and rewards-based fundraising options for startups. 

Fundable takes a percentage of your earnings and allows users to subscribe by paying a monthly fee. Once Fundable approves the campaigns, you’re free to raise money, and fundraisers will find the platform highly beneficial by running successful campaigns. The monthly subscription is $179/month, a fee of 3.5% + $0.30 from each pledge and a 5% platform fee that only applies to successful campaigns. Fundable is ideal for tech startups, US-based startups, or high-growth companies. 

PROS:

1. Equity crowdfunded campaigns can keep funding if the ultimate goal isn’t reached 
2. A low monthly flat fee by subscribers 
3. Rewards-based or equity funding
4. Exposure to additional resources
5. Offers campaign support

CONS:

1. Money isn’t accessible to startups if they don't meet the funding goal or are part of equity crowdfunding
2. The platform fee is a must-pay whether your campaign is successful
3. Only applicable to US-based startups only
4. High monthly fee
5. Joining the platform needs a lot of preparation and documentation.

4. Seedrs

As one of the leading crowdfunding platforms in the UK, Seedrs offers startups access to an extensive network of individual investors. Startups raise capital in exchange for equity, with a minimum of £10 investment amount. 

All successful campaigns pay a platform fee of 6% of the total amount raised. There's also a secondary market where startup investors can trade shares. The charges are; 0.5% of the total funds as a processing fee and a £2,000 completion fee.

PROS:

1. Access to an extensive network of investors
2. Equity crowdfunding offers long-term capital
3. An opportunity to buy and sell shares, which allows for liquidity

CONS:

1. High fees compared to other platforms
2. Only available to UK and European companies
3. Lengthy and rigorous application process

5. Crowdcube

Unlike other sites built for global businesses, Crowdcube is a UK-based equity crowdfunding platform for European companies. Thus, anyone looking to use the platform to raise capital for their small business should first check if they’re eligible. The platform allows fundraisers to set up numerous types of equity crowdfunding on Crowdcube, including private and follow-on rounds.

Crowdcube helps people raise funds for common issues like dividends and follow-on rounds. Although Crowdcube’s community isn’t so big, companies approved for fundraising goals and are successful can join Crowdcube’s Funded Club. 

By joining the club, fundraisers gain absolute benefits from partner organizations. Once the campaign ends, you promote the pitch to your private network or Crowdcube’sCrowdcube’s established community. You pay a 7% fee of the money raised successfully, an extra completion fee between 0.75 - 1.25%  and a processing fee of up to 2.9%.

PROS:

1. Built to serve European businesses
2. Offers numerous types of equity crowdfunding
3. Successful campaigns obtain exclusive benefits

CONS:

1. The fee charged on successful campaigns is too high
2. May not be eligible for companies based outside Europe
3. Small campaigns 

6. GoFundMe

GoFundMe is a free crowdfunding platform founded to support individuals, communities, and charitable projects. The platform offers an opportunity for individuals, charitable causes, and community projects to raise funds for the different needs they're facing.

Because GoFundMe is primarily suitable for personal fundraising, anyone can create a campaign. Backers on GoFundMe often support campaigns that stem from personal networks or local communities. 

These projects are driven by personal interests like helping a family member or raising funds to support a building or renovation of a sports building. Campaigns on GoFundMe can gain momentum and attract a wider audience of backers. Even though the visitors to your campaign page DON’T donate, sharing your profile can enhance visibility.

Unlike other crowdfunding websites, GoFundMe isn’t designed for commercial activities. However, startup owners facing hard financial times can find support on GoFundMe. GoFundMe charges a platform fee of 2.9% plus a 30% payment fee. 

PROS:

1. Suitable for personal fundraising and charities
2. No platform fee

CONS:

1. Not for commercial crowdfunding
2. Success is dependent on personal networks

7. Angel Investment Network

As an equity-based crowdfunding platform, the platform comes with an Angel Investors network. The platform connects startups with this network of individual angel investors to raise funds. 

There’s no minimum investment amount on the platform. Angel Investment Network charges a subscription, a quarterly fee of £2,499 and a 14-day free trial. Angel Investment Network also runs a brokerage service that charges a 15% fee based on the project’s success and is more advisory-focused. The platform also offers mentorship and support to startups. 

PROS:

1. Access network of individual investors
2. Equity crowdfunding can provide capital for the long-term
3. A mentorship and support program from experienced investors

CONS:

1. Stiff competition to get attention on the platform
2. Only suitable for specific industries and project types

8. Crowd2Fund

As an equity and debt crowdfunding platform, startup owners raise capital from individual investors. 

Investors can buy and sell startup shares besides the equity and debt investment options. Crowd2Fund charges a platform fee of 6% of the total fundraised and a 6 -18% Annual Percentage Rate (APR) for loans for successful campaigns.

PROS:

1. Access to an extensive network of individual investors
2. Offers both equity and debt investment options
3. The secondary market allows for liquidity

CONS:

1. It’s only meant for UK companies
2. The application process is lengthy and rigorous 
3. Only viable for specific industries and project types

9. Mightycause

Mightycause is a nonprofit crowdfunding software company. Although less famous than other platforms, Mightycause has raised over $600 million since its launch in 2006.

Instead of running all campaigns under a centralized platform, Mightycause allows you to use their tools and features on your website. These features include:

1. A fundraising page creator
2. Donation forms and buttons
3. Social media
4. Email
5. SMS integration

Mightycause gives you a Customer Relationship Management (CRM) system to manage these tools and features. The CRM displays all crowdfunding activities and generates reports, allowing you to run.  

You can run limitless peer-to-peer, team, and event fundraising campaigns with Mightycause. Campaigns. These campaigns need goals to meet. So, if your fundraiser fails to meet the financial goal, you can keep and use the donations already contributed. Mightycause charges a monthly fee between $79 to $119 depending on your plan and a processing fee of up to 2.2% plus a further 29¢ to process the payment.

PROS:

1. A crowdfunding platform only meant for nonprofit organizations 
2. Tools and features to use on your website
3. No goal requirements
4. Limitless campaigns

CONS:

1. High monthly fee

10. Crowdfunded

Startups offer rewards to backers to raise capital through Crowdfunder. The rewards-based crowdfunding platform has a minimum goal of £1,000, a payment processing fee of 2.4% plus a £0.20 per pledge, and a 5% fee on a successful campaign. The platform also offers startup support and mentorship. 

PROS:

1. Only reward-based- No equity or debt involved
2. A chance to exploit a vast audience of potential backers
3. Access to support and mentorship

CONS:

1. Stiff competition for attention on the platform
2. An all-or-nothing funding model is risky for startups
3. Not for all industries and project types

11. Crowdstreet

On CrowdStreet, real estate projects rally individual investors to support their course. To this date, Crowdstreet has serviced over $4 billion in investments.

Real estate sponsors can access Crowdstreet’sCrowdstreet’s marketplace to raise passive capital to support their construction projects. CrowdStreet also offers digital marketing campaigns for your pitch and support for projects with investor management services. 

As a niche-specific crowdfunding platform, CrowdStreet is only suitable for established real estate firms mainly dealing with commercial properties. The platform has an annual market outlook report that lists the number of projects and sends a signal that may interest investors. The fee charged varies depending on the project.

PROS:

1. The platform is only supports real estate projects
2. Investor management and marketing support

CONS:

1. Meant for real estate projects only
2. Investors go through a thorough vetting process

12. Crowd for Angels

The platform is an equity crowdfunding platform and a peer-to-peer lending platform. Startups raise capital from individual investors; the platform charges a fee only on successful campaigns. The platform also offers a secondary market to buy and sell startup shares. They also allow blockchain-based securities to be issued on platforms with tokens.

Pricing:

• Equity - The application fee is £250, a platform fee of 7% payable on successful raise, and an extra £2,000 completion fee for all legal
• Crowd bond issue - The application fee is £250, 3% is the platform fee payable on a successful raise, and an extra £2,000 completion fee for legal
• Digital assets - The platform fee is 7% only payable on a successful campaign, an application fee of £250, and an extra £1,500 completion fee for legal. A further £5,000 Digitised Asset Preparation Fee

PROS:

1. Access to an extensive network of individual investors
2. Offers both equity crowdfunding and peer-to-peer lending
3. A secondary market that allows for liquidity
4. Offers blockchain-based issuance platform securities with tokens

CONS:

1. Meant for UK companies only
2. An all-or-nothing funding model can be risky for small businesses
3. The platform is limited to specific industries and project types

Factors to Consider When Looking for a Crowdfunding Platform

Running a successful crowdfunding campaign is the goal here. Starting a campaign that can’t fund your startup would be a waste. Hence, you need to be organized and proactive to attract backers from the onset. So, how do you achieve success on crowdfunding sites? You need to choose a platform you’re eligible for and be organized to realize your financial goals. 

When you’re organized, you make actionable plans to help you produce an inspiring pitch which builds backers' trust for your project, inviting prospective investors to come on board. Here are some factors to consider when looking to join a crowdfunding platform:

1. Goals (funding and timeline). Be smart when setting your goals because some platforms operate on an all-or-nothing basis. The principle means you can’t access money raised if it falls short of the set goals. What happens to the money? The funds raised in an unsuccessful campaign are given back to investors. 
2. Usability. Look for a platform that’s easy to use with features and a user-friendly interface to allow easy navigation.
3. Type of crowdfunding. Before joining a crowdfunding platform for your startup, know what you want and how you’ll implement your capital. You can present your company ownership as equity or not. 
4. Pricing. The cost of using a crowdfunding site or platform is essential; sites that charge a foreseeable monthly fee are preferable to those with fee structures.
5. Compliance with legal regulations. Work with a platform that is compliant with crowdfunding legal regulations to avoid getting scammed. For instance, you should be aware of tax implications for the funds you raise. 
6. Tools. Find a site with donation management tools and features that make navigation easy for the entire fundraising process to completion. 
7. Target audience. Fundraising on a crowdfunding platform means a ‘‘crowd’’ will raise the money. Thus, you should research the audience on that platform and if the campaign you’re planning resonates with them. 
8. Success rate. Get a reputable platform with a proven campaign success rate. 
9. Post-investment support. Go for platforms that offer features that keep the fundraising momentum going to the end. 
10. Payment options. Choose a platform with a convenient payment method for backers to pay quickly.
11. Investment options. There are numerous platforms with different investment options available for backers to contribute.
12. Marketing and promoting your campaign. Is the platform you’re about to join equipped with marketing and promotion services? You need a platform that helps you promote your campaign to increase visibility and attract more investors.

Steps to Crowdfunding

Once you’ve joined a crowdfunding platform, here are the steps to follow to launch your fundraising campaign on the right foot: 

1. Choose a Preferred Type of Crowdfunding

Choosing a preferred crowdfunding model is the initial step to fundraising for your startup. Get a model that aligns with your business goals. For instance, if you’re looking to fund a creative idea, a reward-based model is more suitable than a startup looking for investors. Startups need equity-based funding.

2. Research About Each Crowdfunding Platform

Before committing to any crowdfunding platform, read different policies to understand what you’re getting into. Crowdfunding platforms have many policies, and they also charge various fees. Some operate on an all-or-nothing policy, others take a small percentage of the total funds raised, such as monthly subscriptions, while others even charge for processing your payments. 

3. Determine the Amount You Want and the Reason for It

After picking a crowdfunding platform to raise funds for your startup, calculate the money you want for your project and why. Consider taxes, platform fees, payment processing costs, and production as you determine the amount. 

Be transparent as to why you need the money and the amount you need. Backers tend to support campaigns that state clearly why you’re fundraising and how you’ll spend the money. Therefore, transparency is vital to win their trust and get them to donate more. 

4. Share and Promote Your Crowdfunding Campaign

You’re set to promote your crowdfunding campaign on different platforms at this stage. You can create videos or write content that help your audience understand your fundraising goal and make donations. Publish the content to tell the world about the fundraising on social media platforms like Facebook, Instagram (IG), Twitter (X) and websites. 

Alternative ways to promote content include word of mouth, where you tell friends, family, and colleagues, as they can play a crucial role in publicising your crowdfunding campaign in the initial stages. Once funds start coming in, update your backers on the progress to build trust and influence more support. 

Frequently Asked Questions

What is the best way to crowdfund a startup?

The best way to crowdfund your startup is through equity crowdfunding. The fundraising model supports short or long-term equity in a project by allowing investors to get equity from their initial contribution.

Which is the most common type of crowdfunding? 

The most common type of crowdfunding is reward-based crowdfunding. The fundraiser rewards backers for exclusive discounts or early access to new products. 

Can I get my money back from crowdfunding?

You can get your money back from some crowdfunding platforms. These platforms operate on an all-or-nothing funding model whereby fundraisers can’t access the funds raised in a campaign if it doesn’t meet the financial goal. The money collected is returned to all backers, and no one loses anything and no hard feelings. 

In Summary

Crowdfunding platforms provide an opportunity for small businesses to raise capital. However, you need to research the different crowdfunding platforms meticulously. Knowing the strengths and weaknesses of various platforms before fundraising will help you run a successful crowdfunding campaign.

Some crowdfunding platforms are affordable, while others charge high monthly subscription fees to join. Therefore, depending on your financial goals, there’s something for any startup. 

The 12 best crowdfunding sites and platforms for startups benefit startups with different needs. These sites have numerous offers ranging from reward-based crowdfunding, peer-to-peer lending, equity crowdfunding, and donation-based crowdfunding. 

There are many crowdfunding platforms, and each functions differently. When choosing a crowdfunding platform, ensure that you settle for a legit platform that favors your business model, check the platform fees, and policies. Kindly contact one of our experts here, if you have any questions about the best crowdfunding sites and platforms.