Crowdfunding is a relatively new practice of funding in which instead of seeking a loan from a bank or financial institution or angel investors, a company funds its new project by raising money from a community of people who each invest a fixed amount, generating a large fund, for the particular project.
Crowdfunding investment technique can be used by any company, new or old, at any stage of the project development and whenever the need for a financial support arises. It is usually limited to small funding requirements.
Crowdfunding, like crowdsourcing, is a way of accepting money/information from a number of people who are related to a particular field.
Crowdfunding is probably the best way for a startup or a small company to raise funds for a new project. That along with the internet advantage makes it an obvious choice of modern business fundings.
However, finding people who would be interested and compelled to invest in your idea/project is not that easy. In fact, this is the reason why many companies avoid this funding option.
Thankfully, there are a number of crowdfunding websites that can help you find the people for your funding needs. In this article, we will talk about some of these platforms that provide crowdfunding for startups.
What is a Crowdfunding platform?
A Crowdfunding platform is a website that provides you with a central place to share your ideas and invite people who would be interested to invest in that idea. It also lets you raise and manage funding for your projects. One thing you should know about these platforms is that they are not free. Most of the crowdfunding investment platforms out there would take a commission of your funds. The commission may range from 2.5 percent to as high as 15 percent, depending on the website.
If you’re an investor and wondering about crowdfunding investment return, you should talk to an expert.
Top 10 crowdfunding platforms of 2018
Here are 20 sites that can you help you find the people for investment in your startup or a new idea/project.
Kickstarter has been providing crowdfunding for startups for a long time now. It has even become a general term for online crowdfunding.
Kickstarter accept contributions in the form of pledges which are given by general public to support a new idea, project or invention. You can raise funds for almost every type of creative idea, such as a movie, a book, an album you want to develop, or a futuristic invention of yours.
However, the funding is strictly for an idea or project and not for buying equipments or resources, or even helping an NGO.
Users can start taking financial pledges on their new projects and keep the funds only if they reach the targeted goal. Kickstarter allows you to raise funds in a range of industries, including arts, music, design & tech, film, publishing, and more.
If you are looking for an equity crowdfunding platform, this is the place for you. It provides a perfect platform for entrepreneurs and new businesses to raise capital for their upcoming projects by selling shares of an unlisted company.
It is not easy to find buyers for your company shares when your business is not even listed on a stock exchange. This is where RocketHub, which is arguably one of the best equity crowdfunding sites 2018, comes in.
They have a community of investors with whom you can connect in the ELEQUITY ROOM to share your idea and find those who might be interested to fund it, in exchange for a sharing in the company.
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The platform works more or less similar to Kickstarter, except for the difference of allowed industries. For instance, Indiegogo allows fundraising for nonprofit projects and organisations as well.
It also supports Flexible Funding, where the organiser gets to keep the funds raised by them even if the target is not met.
This is a very useful option since not all of the projects on these online platforms successfully meet their crowdfunding goals.
Indiegogo is a better crowdfunding investment option when you are looking for these specific services, otherwise, go for Kickstarter.
The Crowdfunder platform gives you access to a host of angel investors and venture capitalists who are there to invest in every kind of project with a realistic idea.
If you are looking to raise funds by selling debt or equity in your company, this is a perfect equity crowdfunding option for you. If your project idea is worth their time, you can easily manage to find reliable investors through this platform.
It is a more personal that professional purpose crowdfunding platform, where anyone can ask for funds for any personal emergency. It is like borrowing 100 bucks from your friend with the promise to return it in time.
However, the platform can also be used to raise funds for short-term and small projects. If you are looking to get money for an emergency cost that you cannot fund by yourself, this is the platform for you.
Charitable is a fundraising application that is available in the form of a WordPress plugin that you can directly integrate with your website and start accepting donations via PayPal.
This is particularly useful fundraising mechanism for nonprofits that want to raise donations from their followers and public without having to pay a transaction fee, as the plugin is free to use.
However, it doesn’t provide a platform to find investors. You are supposed to have your own blog along with a way to bring investors to it.
Kiva is a special kind of crowdfunding platform which works on the mechanism of lending-borrowing. There are no angel investors, but concerned people who help others by lending micro amounts for their startups and new projects.
The platform is accessible all over the world and can be used for funding specifically in micro and small business spaces. The funds you can borrow or lend has virtually no limit. The loan you make is returned back in time so that you can help others by using that money.
Similar to music funding, this platform is particularly designed to fund movie projects. As you can imagine, the platform lets movie makers share their ideas and get funds to fuel their projects. The funds can be raised for almost every kind of movie, including documentaries, comedies, dramas, and even theatres.
If you are investing in a movie through this platform, you can also analyze your crowdfunding investment return by watching the movie in which you’ve invested.
AngelList is more than just a crowdfunding platform. It lets you find investors and lenders for a new project by simply writing an application. But that’s not all. The platform is also useful if you are an investor looking for a nice place to invest your money.
Moreover, you can use the job portal feature of AngelList equity crowdfunding to find yourself a nice job at any of the thousands of companies on the website, just in case if your startup idea doesn’t pan out.
This is an equity crowdfunding platform for non accredited investors. If you are looking to raise venture capital for your new project, you can start by posting your business idea here. Investors can fund your project in exchange for an equity or share in your company.
However, the transaction cost, as well as the membership fee, is high enough to make you think twice before joining the platform. Also, you do not get anything if your crowdfunding campaign does not meet its goal.
So, that’s it. This list can help you find the right platform for your next project crowdfunding, no matter what scale and for which project. Investors can also benefit from these options for connecting with potential investment opportunities.