7 Best Crowdfunding Sites for Small Businesses
Crowdfunding is a modern means of financing any project from tech to apparel design and everything in between.
That said, not everyone knows that there are several different types of crowdfunding sites. Some function more like traditional loans or VC investments. Others rely on donations made in exchange for a product at the close of the campaign.
When you’re trying to scrape up every penny you can to get your business off the ground, it’s well worth exploring all your options.
We’ve put together a list of our top seven crowdfunding sites–each offering a different approach to raising money for startups. Let’s take a look:
1. IndieGoGo–The Biggest of the Crowdfunding Sites
Because they are the largest global fundraising site, a wide-range of small businesses use Indiegogo. The startups featured on here fall into tech, design, film and more–really, this may be appropriate for any small business just getting started.
Indiegogo gives you two options. You can set up an all-or-nothing campaign or one that lets you use what you earn, even if you don’t meet the initial goal.
The platform does take a cut of your earnings–5% of the total funds raised, plus 3-5% of payments processed.
One of the best-known sites to raise money, Kickstarter doesn’t discriminate when it comes to product categories. This platform allows small businesses or individuals to test the potential of new products or raise money for something like an album, a new piece of clothing, and so on.
This may be a good option for startups who haven’t raised any money to date.
You are on the hook for giving Kickstarter a cut of your funding–5% of the money raised from successful campaigns, plus 3-5% of payment processing fees. Kickstarter is an all-or-nothing funding model. Meaning, if you don’t reach your goal, you don’t get to use earned funds, and investors get their money back.
Fundable is a platform dedicated to helping companies raise capital. You’ll have the option of selecting an equity-based or rewards-based funding system. Equity funding means giving up part ownership in your company until you can repay your funds. Rewards funding, by contrast, means, investors get your product in exchange for an up-front investment.
The benefit with this platform is, the Fundable team is on hand to help you navigate the fundraising process. Additionally, Fundable is unique in that it combines funding sources. You’re drawing from a pool of pro investors, as well as friends and customers.
There is a fee–$179 each month, for the duration of your campaign. Keep in mind that you’re getting more attention than you’d get with Kickstarter and Indiegogo and it’s a flat fee.
4. Lending Club
Lending Club is an interesting option. It’s peer-to-peer lending, which works a lot like lending money to a friend. The platform makes it easy for borrowers to access funds without resorting to traditional banking channels.
On the investor side, Lending Club is a point of entry to larger projects. There’s a little risk involved, but users can create loan portfolios online with minimal effort.
Lending Club does a good job connecting borrowers with people who need to raise money. That said, things like your credit score can impact your interest rate–just like a traditional loan.
Angellist is an online equity funding site that connects startups with venture investors. Anyone can create a free Angellist account, but startups seeking angel funding need to meet some basic criteria before they are eligible for equity crowdfunding.
AngelList does present some challenges. As a startup, you must already have received at least 100k in seed funding–but you’re connecting with a strong investor pool.
Additionally, the platform provides a job matching service. You can find remote workers or web developers who can help you grow while seeking the right angel.
Another equity funding site, CircleUp is a little more niche than Angellist. This platform specializes in high-growth startups in the retail and consumer products sector.
The site works with industry leaders like Procter & Gamble and General Mills to help startups take their operation to the next level. Most of the featured products on the CircleUp site are snacks that lean toward the natural foods end of the spectrum.
With that in mind, it’s definitely not for everyone, but it may be a boon for startups seeking to get their products into stores and increase brand awareness.
MicroVentures is a platform that describes itself as an “investment bank for startups.” The funding site does due diligence on startups before presenting them to investors.
Once you get approval to use the service, the site helps connect startups with interested investors. Verticals include everything from green technology to cosmetics, gaming, social media, software, and more.
What’s more is, the platform is SEC-approved and assists with more than crowdfunding. Angel investments and private stocks are additional fundraising possibilities. While there’s more of a barrier to entry with MicroVentures, it may well be worth checking out.
Get the Scoop on Startups
We know striking out on your own can be intimidating and overwhelming at times. Whether you’re navigating through crowdfunding sites or trying to hire a team of remote workers, it’s nice to see what others have to say.
The Opstart blog features a lot of relavant info about funding options, marketing and beyond. Click here for the latest startup advice.