You’ve put together a business plan, invested all your savings, and have been working on your idea as a side hustle for a few months. Finally, you feel like it’s the right time to take the leap and raise some real capital. Does this sound familiar?
Luckily, the bank isn’t your only option to fund your business venture these days. There are crowdfunding sites abound on the internet, and I’ve rounded up a few of the best in this post. Whether you’re funding the next hottest startup, a creative endeavor, or a caused-based organization, you’ll find a crowdfunding site below that’ll help you hit your goal quickly.
Crowdfunding is a way for small businesses or startups to raise money in exchange for equity, rewards, debt, or nothing at all. Business crowdfunding can provide you with fast access to cash, but it requires a strong promotional strategy, transparency, and possibly giving up some equity in the business.
Crowdfunding your next business venture can be a fast and relatively easy way to raise money. However, you should know which type of crowdfunding is best for your business and what it requires. Here are the most common types of business crowdfunding:
- Equity crowdfunding: The most traditional type of funding in this list is equity crowdfunding. You sell a piece of your business to an investor or groups of investors and they provide you with the funding (capital) to move your business forward.
- Donation crowdfunding: If you're a nonprofit or local business, donation-based funding might work for you. It simply requires you to create a campaign asking for donations for your business. The money is donated, and there is nothing to repay.
- Debt crowdfunding: Also called "marketplace" funding, debt crowdfunding is when business owners borrow money from other individuals, instead of from a bank. You borrow at a set annual percentage rate, and loans are often structured similar to those of a traditional business loan.
- Rewards crowdfunding: This is likely the most well-known type of crowdfunding. Made popular by sites like Kickstarter, funders are offered products, services, or other gifts in exchange for a set donation amount. For example, if I'm trying to fund my dog walking business, I might offer one hour of puppy snuggles to anyone who donates $50. For those donating $100, I might offer one hour of puppy snuggles plus a free grooming session.
Best Crowdfunding Sites
Kickstarter helps artists, musicians, filmmakers, designers, and other creators connect with the resources to bring their ideas to life. Since its launch in 2009, the company has helped 15 million people pledge $3.7 billion to successfully fund more than 143,000 projects. Funding is all or nothing, so you must meet the goal you set within the allotted time or everyone gets their money back.
What we like about Kickstarter: It’s a widely known and trusted platform on which to raise money and users are actively looking for early startups to support.
Price: It’s free to create a project on Kickstarter, but if it’s successfully funded, Kickstarter applies a 5% fee to the collected funds. There will also be processing fees between 3-5%.
Indiegogo offers both live crowdfunding campaigns and a marketplace for innovative products. It’s helped entrepreneurs raise over 1 billion dollars for more than 650,000 projects. Acquire starter capital and find out quickly whether your idea has legs with Indiegogo’s “global network of early adopters.”
And with this platform, you don’t have to stop raising money at a specific time. There are no fundraising targets or deadlines. Plus, you can apply equity, offer securities, revenue sharing, and even cryptocurrency sales.
What we like about Indiegogo: You’ll get a dedicated following of supporters who not only fund your project but can help spread the word about it to their following.
3. Crowd Supply
Crowd Supply’s mission is to “bring original, useful, respectful hardware to life.” Whether you want to bring a family recipe to market, create cutting-edge open hardware, or build electronics, Crowd Supply can help. 80% of launched projects have been successfully funded and the average amount raised per successful project is $61,000.
What we like about Crowd Supply: This crowdfunding space dedicates their platform to giving visibility to hardware projects at a time when software-focused companies are at the forefront.
Price: Crowd Supply has a variety of plans. The Standard plan is 5% of gross campaign sales, not including payment processing fees and the Custom plan is 6-15%. Features differ among plans and include campaign management, media asset creation, and even a dedicated PR team.
Experiment is a platform dedicated to funding scientific discoveries. From dinosaur fossil excavation to the historical study of medieval monasteries — Experiment backers will fund it if it “pushes the boundaries of knowledge.” They fund projects themselves, so there’s no overhead like the 50-60% that comes with a university grant. Here are the guidelines for what makes a fundable experiment.
What we like about Experiment: The low barrier to entry of Experiment makes scientific research accessible to researchers who aren't affiliated with a university or government grant program.
Price: It’s free to start a project, but once you receive full funding, Experiment charges an 8% platform fee plus payment processing fees between 3-5%.
If you have a social cause organization aimed at helping animals, your community, or the environment — to name a few — Chuffed can help. For nonprofits and cause-based organizations exclusively, their most successful campaigns raise an average of $7,000. Nearly 8,000 campaigns have successfully raised $18 million collectively.
What we like about Chuffed: Chuffed uses crowdfunding to operate its business, and carries that philosophy onto its platform users. Donors can choose to pay platform fees if they have a great experience. Otherwise, the platform lets users keep 100% of the money donated to them.
Price: Donors can opt to pay your processing fees. Donors are also encouraged to make a small donation to Chuffed on top of that.
Patreon allows artists, musicians, writers, and more to receive compensation for their work via memberships that their fans purchase. Providing a meaningful revenue stream, fans pay you a subscription amount of their choosing in exchange for exclusive experiences and behind-the-scenes content. Over $350 million has been paid to creators, and the average patron pays a monthly fee that’s more than most consumers pay for Netflix or Spotify.
What we like about Patreon: The platform puts creators in charge of their monetization strategies as opposed to an algorithm that can be tricky to optimize.
Price: Patreon takes 5% of successfully processed payments. There’s also a payment processing fee each time a payment is processed (usually batched at the beginning of each month). You can also expect payout fees charged for moving funds from your creator balance to your bank or PayPal account.
Create a profile, then choose whether you’d like to raise funds by selling your product, taking pre-orders, and selling merchandise or by raising funds from accredited investors. The former, the rewards program, is recommended for consumer-facing companies aiming to raise up to $50,000. The latter, the equity program, is recommended for between $50,000 and $10 million funding goals for product, service, or B2B businesses.
What we like about Fundable: Fundable recognizes that B2B and B2C businesses operate differently, and therefore source funding differently. The company tailored the path for B2B and B2C ventures to both succeed on the platform.
Price: It’s free to create a company profile then $179/month to fundraise. There are no success fees, but for rewards-based raises there is a processing fees of 3.5% + $.30 per transaction.
WeFunder allows you to raise between $50,000 and $50 million from investors. Most campaigns take between one and three months to reach their goals. From breweries and restaurants to tech startups and fashion businesses, you’ll be able to solicit funds from WeFunder’s more than 150,000 investors.
What we like about WeFunder: In just 15 minutes, you can begin raising funds for your next venture by creating a free account to get started.
Price: It’s free to create a profile. WeFunder doesn’t charge management or transaction fees. Administrative fees are charged to investors which covers all the costs of operating WeFund.
SeedInvest works with high-growth, professional, and early-stage companies. You can raise either preferred equity or convertible note funding. For priced rounds (preferred equity), you’ll need to provide the pre-money valuation. And for convertible notes, you’ll need to provide the valuation cap, conversion discount, interest rate, and term length.
You’ll need to create an application, make it through a screening committee, and conduct your due diligence before making a profile and closing your round. This is a platform for companies that are ready to make it big. You should expect the process to take a minimum of 60 days to complete.
What we like about SeedInvest: This platform helps early-stage startups with everything they need to take to secure funding. If you've never raised capital before, SeedInvest offers experienced support to help every step of the way.
Price: There’s a 7.5% placement fee charged on the total amount raised on SeedInvest, and it’s paid only on the successful completion of your offering. You can also expect a 5% warrant coverage based on the amount raised and up to $10,000 in due diligence, escrow, marketing, and legal reimbursement expenses.
“Raise money for anything,” no raise requirements or startup fees involved. That’s the message Fundly's homepage puts front and center. They fund everything from personal health needs to politics and even trips. Create a page, manage your campaign from the Fundly app, and use Fundly’s Facebook OpenGraph integration to maximize your reach.
There’s no minimum amount to raise to keep your funds, payments can be withdrawn within 48 hours of the donation, and automatic transfers can be arranged.
What we like about Fundly: You can cash out your funding on a daily, weekly, or monthly schedule which makes this platform great for making your cash flow consistent.
Price: Everyone pays a platform fee of 4.9% plus a credit card processing fee of 2.9% and $.30 per transaction (depending on your country).
LendingClub provides personal loans up to $40,000 and business loans up to $300,000. LendingClub is not a bank. They connect borrowers with investors. In exchange for solid returns, investors purchase Notes that correspond to fractions of loans. LendingClub screens borrowers and facilitates all transactions.
For business loans, get all your capital upfront, one-to-five year terms, no monthly payments, and no prepayment penalties. They recommend their loan program for large, one-time expenses. LendingClub also requires your business to be in operation for 12 months or more, have at least 50,000 in annual sales, no recent bankruptcies or tax liens, and for you to have ownership of at least 20% of the business.
What we like about LendingClub: If you like the idea of raising funds without handing over equity to investors, LendingClub is a smart choice.
Price: Expect an origination fee of between 1.99 and 8.99%, and total monthly payments per $10,000 borrowed of between $227 and $955 with total annualized rates of between 9.77% and 35.71%.
StartSomeGood is a cause-driven crowdfunding site. If you have an uplifting project that needs funding, StartSomeGood can help. You can be a nonprofit, for-profit, unincorporated group, or any other status — they care about your ability to have a social impact. View more of their criteria here.
What we like about StartSomeGood: StartSomeGood realizes that meaningful change can take time, so you don't have to reach your goal within the specified time period of your campaign in order to use this platform. So long as your project or initiative is new and meets the guidelines, you're eligible to raise funds.
Price: It’s free to submit your project, and you’ll only pay a service fee of 5% if your project reaches its funding goal. You can also expect payment processing fees of 4.9%.
Crowdcube is an equity crowdfunding platform built to turn your friends, family, fans, and customers into investors. They’ll help you set realistic targets, a sensible valuation, an effective pitch, and a well-executed communication plan to unlock Crowdcube’s investor community.
You’ll launch publicly when your pitch reaches 20% of the goal you set. If that's not enough encouragement, the average pitch reaches its full target in just 22 days. At 75% funding, Crowdcube’s legal team will become involved to help complete your round quickly.
What we like about Crowdcube: Crodcube supports seed, earl, and growth-stage finance options so you can continue using the same platform as your venture scales to new heights.
Price: There are no fees for listing your business on Crowdcube. You’ll be charged a success fee of 7% on the amount you successfully raise, and payment processing fees also apply.
15. Funding Circle
Expand, hire staff, or fund your next step with fast, affordable business loans. They’ve funded veterinary clinics, cosmetics brands, and more. Interest rates run between 4.99% and 26.99% per year, and you’ll repay in between six months and five years. There are no prepayment penalties, and you can borrow between $25,000 and $500,000. Simply fill out an online application, enjoy a dedicated account manager, and get a fast decision.
What we like about Funding Circle: You don't need to be a finance expert to benefit from this platform. If you're not sure what type of funding is right for you, Funding Circle can help you figure it out with a six-minute application.
Price: Besides possibly steep interest rates, you’ll pay an origination fee of between 0.99% and 6.99%. There’s also a 5% charge on late payments.
FundRazr is a crowdfunding site built for individuals, nonprofits, and businesses. Their platform is built with ease of use as the priority with no complicated tech setups. However, they do offer website and CRM integrations, recurring donations, incentives, and secure payment processing.
What we like about FundRazr: Nonprofits, individuals, and businesses can use Fundrazr to raise capital for business ventures or personal causes.
Price: You can choose from their multiple pricing models, whether you need supporters to take care of the fees, you want to keep it simple, or you want the flexibility to design custom pricing. However, there is no setup or monthly/annual fees for any of the pricing structures. Two of the pricing structures have a payment processing fee of 2.9% plus $0.30 per transaction, but with the Pro Model, you can build it into your plan.
GoGetFunding is a global crowdfunding platform that hosts all kinds of fundraising campaigns. While it's particularly popular for individual causes, GoGetFunding does allow fundraisers for startups and businesses. Part of the service even includes timed campaigns, proactive PR, and a personal fundraising coach.
What we like about GoGetFunding: Your fundraising campaign has virtually no limits with GoGetFunding. Raise funds internationally with this global, multi-currency platform.
Price: GoGetFunding beats the 5% platform fee that many crowdfunding sites charge, coming in at 4%, which can make a big difference for large fundraisers.
Ulule is the leading crowdfunding platform in Europe and offers international crowdfunding. When you start a project on Ulule, you set a fundraising goal. If you do not reach the goal, the donations are refunded to your backers and you don't have to pay any fees. However, Ulule maximizes success by through its approval process and support to fundraisers by giving advice on displaying the project and using the platform.
What we like about Ulule: If you don't have extra funds to dedicate to marketing your fundraising campaign, Ulule makes it easy for supporters to find causes that align with their personal values and back them with financial support.
Price: Ulule takes a commission based on the currency and payment method that's used. Check here for more information on their pricing.
CircleUp helps startups in the consumer goods space secure capital through credit and equity crowdfunding. By applying to work with CircleUp, you'll be able to speak to credit advisors to determine the best financing solutions for your business.
What we like about CircleUp: This platform uses a technology called Helio that helps predict the next big breakout companies with untapped potential.
Price: Determined on a case-by-case basis.
EquityNet helps connect entrepreneurs with accredited investors in order to raise business capital. The platform has been around since 2005, and there are more than 25,000 investors in the network. Unlike other crowdfunding sites, EquityNet accepts all legal and ethical companies who apply, and they don't take a commission.
What we like about EquityNet: There are three different plan options to choose from: Starter, Premium DIY, and Full Service. These range from free to $2,000+ so there's an EquityNet plan for startups at just about every maturity stage.
Price: There's no platform fee or commission. However, you may need to pay a subscription fee of $199 per month to access their more advanced features.
Classy provides conversion-optimized crowdfunding campaigns for nonprofits. With donor engagement features and perks such as sponsor matching, you'll be able to fundraise effectively and show your donors the impact they're making.
What we like about Classy: You can shake up the traditional giving process with fun features like peer-to-peer fundraising. Friends and family can donate on behalf of the primary donor when they become part of their team.
Price: Determined on a case-by-case basis.
Seedrs is another equity crowdfunding platform that connects entrepreneurs with investors, allowing buyers and investors to exchange shares. The platform isn't just for fundraising and connecting to investors, either; it helps entrepreneurs network and acquire customers as well, all from the same platform.
What we like about Seedrs: Seedrs simplifies the fundraising journey to just six steps — simple for first-time fundraisers who want a little more guidance.
Price: If the fundraiser is successful, you'll be charged a 6% fee plus payment processing. In addition, there's a £2,500 completion fee that covers administrative support such as communicating with investors.
Mightycause is a fundraising platform that puts relationship building at the forefront of its mission to power nonprofits to change the world. There are four product offerings to suit any fundraising style, including nonprofit funding, year-round fundraising, team and event fundraising, and giving days and giving events.
What we like about Mightycause: New nonprofits that are launching can benefit from Mightycause because the company offers donor management in addition to fundraising management tools.
Price: The Powerful Essentials Plan for small nonprofits is $59/month, billed annually. The Ultimate Advanced Plan for the growing nonprofit is $99/month, billed annually.
Choosing the Right Crowdfunding Site
- Determine the type of funding you need.
- Calculate how much funding you need.
- Understand the fees associated with the crowdfunding site you choose.
- Choose multiple sites to appeal to diverse audiences.
- Read the fine print to ensure you can meet the requirements to claim your funds.
Editor's note: This post was originally published in June 2019 and has been updated for comprehensiveness.
Originally published Sep 28, 2021 5:00:00 PM, updated September 28 2021