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The Best Crowdfunding Platforms Companies of 2021
How We Chose the Best Crowdfunding Platforms
There are a lot of crowdfunding companies available touting multiple features and services. We evaluated companies on what’s most important: crowdfunding options, payment options, and reports.
Crowdfunding Options
Many crowdfunding platforms are specialized to serve a specific niche and attract certain types of donors. Furthermore, there are multiple options for funding a project that range from simple donations to complicated equity-based solutions. What works for a nonprofit might not be the best solution for an individual or a small business. In our breakdown, we recommend software that allows the user to run different types of crowdfunding campaigns, such as reward, debt, and equity crowdfunding.
Payment Options
Crowdfunding platforms vary widely when it comes to fees, subscription options, and processing charges. Some platforms require users and donors to have a certain type of payment account, such as PayPal or Stripe, to be able to access funds from their campaign. A few platforms require users or donors to be certified in some way before they can use the service, such as equity-based crowdfunding platforms that require investors to have a certain net worth before they can be accredited and invest in projects. For the best fundraising outcomes, users should look for crowdfunding platforms that accept multiple types of donations. For example, donors would ideally be able to make both one-time and recurring donations.
Reports
For users to maximize the response they will get from their crowdfunding campaign, they need to stay up to date on how the project is going. Detailed reports help the user measure and improve their crowdfunding efforts. Information such as the number of views, number of donors, total amount raised, average donation amount, and how donors found the project are all interesting and useful pieces of data that can help users tweak their campaign or marketing strategy to get a better response. For platforms that require users to raise a certain amount or have a time limit for campaigns, current reporting becomes even more important as a feature.
The 15 Best Crowdfunding Platforms of 2021
AngelList
AngelList is a U.S. website for start-ups, angel investors, and job-seekers looking to work at start-ups. Founded in 2010 in San Francisco, the company was originally envisioned as a way to make the investment process more accessible by helping start-up companies gain better access to funding and potential employees. AngelList is primarily an equity-based crowdfunding platform where users give a certain percentage of their company to investors based on the amount of funding provided. Its donor-facing marketing is focused on potential venture capitalists and angel investors.
For users, it provides reports to help entrepreneurs stay informed about the progress of their project and allows start-ups to provide incentives and other rewards for investors who commit at a certain level. Unlike some other equity-based crowdfunding platforms, AngelList does permit one-time donations as well as nonprofit fundraising. Although AngelList only gives custom quotes instead of publishing its pricing information, it provides a free demo so users can see if it works for them before committing to the platform.
| Price | Free Trial/Demo | Features |
|---|---|---|
| Custom Quote | Free Demo Only | >Provides reports >Allows one-time donations >Permits rewards for supporters >More features at AngelList |
Pros & Cons of AngelList Crowdfunding Platform
For start-up companies that need cash, AngelList makes a compelling case for itself. So far, it has facilitated over $1 billion in transactions and 36% of all top-tier venture capital deals in the United States over the past year. However, with its focus on attracting donors interested in investing or looking for job opportunities, it’s not a great fit for those interested in other types of fundraising.
| Pros | Cons |
|---|---|
| >Email and phone support >Free demo available | >Markets mostly to donors interested in investing, limiting its usefulness for other types of fundraising |
What Customers Are Saying
Both users and investors who use AngelList seem satisfied with the platform. One entrepreneur commented, “AngelList is a great way to market your deal. Lots of people will see it.” From the VC perspective, AngelList is also a helpful resource for identifying potentially high-performing opportunities, with one sharing, “If we have way more companies to observe who have money from angels to get to a point where they prove traction (or don’t) that’s a gift to the VC community.”
CircleUp
CircleUp is another equity-based crowdfunding platform. It hosts consumer product and retail companies and primarily supports direct equity investments from individuals. CircleUp is unique because it offers qualified start-ups the opportunity to fund their businesses using their equity capital through CircleUp funds, which is the crowdfunding aspect of their model, or through credit financing from CircleUp credit advisors. Companies that use CircleUp must be based in the United States and typically are consumer product companies that sell through wholesale channels or direct means using e-commerce.
There are many industries in the consumer products range represented on CircleUp, including food and beverage, personal care, clothing, household goods, electronics, pets, and children’s products. Like most other crowdfunding platforms, CircleUp offers web-based software and regular reports. Unlike many other platforms, it’s not designed for nonprofit fundraising and doesn’t permit one-time-only donations.
| Price | Free Trial/Demo | Features |
|---|---|---|
| Custom Quote | None | >Web-based software >Integrates with other programs >Offers regular reports >More features at CircleUp |
Pros & Cons of CircleUp Crowdfunding Platform
For start-ups in the consumer product space interested in equity-based fundraising, CircleUp seems like a tailor-made solution. It offers both email and phone support, and there’s no monthly subscription fee. However, CircleUp doesn’t make pricing information public and only provides custom quotes, plus there’s no free trial or demo.
| Pros | Cons |
|---|---|
| >Offers email and phone support >No monthly subscription required | >No free trial >No one-time donations or nonprofit fundraising |
What Customers Are Saying
Both entrepreneurs and investors like CircleUp’s ability to foster close relationships through a web-based platform. One investor noted that CircleUp offered “open access to the CEO” and praised the platform for offering to send a sample of the consumer product to the potential investor’s home so they could try it out before deciding whether to invest.
Companisto
Companisto is an equity-based crowdfunding platform based in Germany. Like many similar platforms, it’s a web-based software that supports integrations with other applications. Launched in 2012 in Berlin, it’s aimed at helping start-up companies find investors, making it somewhat unique among Europe-based crowdfunding platforms. Companisto allows investors to choose between being lenders who receive interest payments on their investment or shareholders who instead gain a stake in the start-up and share in any future profits the company makes. It does allow nonprofit fundraising but doesn’t permit one-time donations. One interesting feature that could make it more appealing to investors is its networking functions. Investors can create profiles and join the Investor Room online to connect with other investors.
| Price | Free Trial/Demo | Features |
|---|---|---|
| Custom Quote | None | >Web-based software >Phone and email support >Supports integrations >More features at Companisto |
Pros & Cons of Companisto Crowdfunding Platform
Companisto boasts over 100,000 members, making it Germany’s largest network for start-up investments. So far, it has connected investors to more than 100 start-up or growth company opportunities. It does allow nonprofits to participate and doesn’t require a monthly fee. However, it doesn’t publish pricing information and only provides custom quotes, and there’s no free trial or demo for users who want to try out the service before committing.
| Pros | Cons |
|---|---|
| >Doesn't require a monthly fee >Permits nonprofit fundraising >Provides reports | >None >No one-time donations allowed |
What Customers Are Saying
Investors have mostly positive comments about Companisto in online reviews, noting that the crowdfunding platform is one of the only ones in Europe that “facilitates direct investment in businesses.” It seems many investors are attracted by the idea of finding promising start-ups this way since they can share, as one noted, in “all profits and payments the business makes.”
Crowdfunder
Crowdfunder is a platform that specializes in equity-based fundraising. Although many users are looking for early-stage or seed investment, it also works for companies that are farther along in the process and seeking Series A or B funding. There are quite a few tech start-ups represented, but Crowdfunder stands out due to the number of small and local businesses and film and entertainment opportunities that also use the platform. Unlike most other equity-based sites, you don’t have to give Crowdfunder a percentage of the amount you raise. However, you will have to pay a monthly subscription fee to use the platform. The price ranges from $299 per month for the Starter package to $999 per month for the Premium Plus package. In exchange, Crowdfunder gives you access to its network of accredited investors.
| Price | Free Trial/Demo | Features |
|---|---|---|
| Starts at $299/month | Free Demo Only | >Web-based software >Email and phone support >Supports integrations >More features at Crowdfunder |
Pros & Cons of Crowdfunder Crowdfunding Platform
Although the monthly subscription fee may seem a bit steep, the predictability of what you owe may appeal to some users. Plus, unlike some other platforms, Crowdfunder allows you to keep whatever you raise whether or not you meet your funding goal. It also offers a free demo so you can try out the platform before you commit to subscribing. However, one-time donations are not permitted.
| Pros | Cons |
|---|---|
| >Doesn't charge a percentage fee of the amount you raise like other platforms >Allows users to reward donors who contribute at certain levels | >No one-time donations allowed |
What Customers Are Saying
Crowdfunder users have very positive comments about the platform’s personalized customer service. One user shared, “Crowdfunding can be daunting, but the team was so encouraging and I felt supported throughout the duration of the campaign.” Another user commented, “When donations were starting to slow down they gave us some very useful advice to help pick it back up again.”
Experiment
Experiment is an innovative crowdfunding platform specifically designed for discovering, funding, and sharing scientific research. This unique platform allows researchers, who frequently rely on grants and other external funding sources to meet their needs, to directly access donors who are interested in seeing their projects succeed.
The New York-based platform allows researchers to post projects that need funding, which enables them to solicit donations as well as spread awareness about their research. Experiment has backed research in several scientific disciplines, including economics, physics, biology, and medicine. It’s free to start a project and there are no monthly fees, but if a project is fully funded, Experiment charges an 8% platform fee in addition to payment processing fees.
| Price | Free Trial/Demo | Features |
|---|---|---|
| 8% platform fee + 2.9% processing fee + $0.30/donation | None | >Web-based software >Email and phone support >Offers reports >More features at Experiment |
Pros & Cons of Experiment Crowdfunding Platform
With its focus on funding science, Experiment has identified an interesting and underserved niche. Despite the all-or-nothing approach, it’s free to start a project, so there’s very little downside for scientists and other researchers who are interested in using the platform. Even if their project isn’t funded, it’s a new way to reach people who might be interested in the work. However, the 8% platform fee might be a little tough to swallow if the project winds up being fully funded. The platform doesn’t offer a free trial or demo.
| Pros | Cons |
|---|---|
| >Crowdfunding specifically designed for scientists and innovators >Free to start a project | >8% platform fee if the project is fully funded |
What Customers Are Saying
Online users seem excited about Experiment’s potential impact on the research field, noting that the founders also come from scientific backgrounds. One user commented, “They are building something for themselves; something they would want to use.” Another backer said, “Basic scientific research is the building block of innovation and they are the passionate, smart team to help re-engineer the scientific process.”
Fundable
Launched in 2012, Fundable is an equity-based crowdfunding platform specifically geared at small businesses. Users may either offer rewards or equity in their company to encourage funding. To join Fundable and access its web-based platform, users must pay a $179 monthly subscription fee plus processing fees for each transaction. Users must pay this fee regardless of their success on the platform. However, they gain access to Fundable’s network of accredited investors, who must have at least a $1 million net worth.
| Price | Free Trial/Demo | Features |
|---|---|---|
| $179/month, plus 3.5% platform fee + $0.30/donation | Free Demo Only | >Web-based software >Supports integrations >Email and phone support >More features at Fundable |
Pros & Cons of Fundable Crowdfunding Platform
Fundable offers more flexibility than some other equity-based crowdfunding platforms since users can offer a reward instead of a share in the company if they prefer. It doesn’t permit one-time donations, and the monthly fee may make users a bit wary since there’s no guarantee of success. However, its focus on small businesses and customer service reputation could make using it worthwhile.
| Pros | Cons |
|---|---|
| >Allows rewards for users who donate at a certain level >Provides reports | >No one-time donations |
What Customers Are Saying
Online users praise Fundable for the level of access it provides and for its customer service. One satisfied user wrote, “The platform helped us raise capital and gave us exposure to a network of investors we wouldn’t have otherwise been able to access. The Fundable team we worked with was responsive and accessible throughout the duration of our campaign.” Another shared, “I always try to work with the best people I can find and I was completely satisfied with the team at Fundable.”
Funding Circle
Funding Circle specializes in debt-based crowdfunding. It’s a global small business loan platform that connects users who need to borrow money with investors interested in funding small businesses through loans. Funding Circle investors may be retail investors, banks, asset management companies, or insurance companies. Since the company launched in 2010, its investors have provided over $12 billion to 90,000 businesses around the world.
Approved users can borrow between $25,000 and $500,000 through Funding Circle. To qualify for a loan on Funding Circle, you must meet the following requirements:
- Two years of business history
- A personal FICO credit score of at least 660 for business owners
- No personal bankruptcies within the last seven years
- Not located in Nevada, due to state lending regulations
- Not operate in an excluded industry, which includes speculative real estate, nonprofit organizations, weapons manufacturers, gambling businesses, marijuana dispensaries, and pornography
| Price | Free Trial/Demo | Features |
|---|---|---|
| One-time origination fee of 3.49%-6.99% of approved loan amount | None | >Debt-based crowdfunding platform >Web-based >Offers phone and email support >More features at Funding Circle |
Pros & Cons of Funding Circle Crowdfunding Platform
If you’re interested in accessing a traditional loan but want to try doing it through a crowdfunding platform, Funding Circle has a proven track record of being able to connect investors to small businesses and has a large pool of potential investors on hand. The site is quick to let you know whether your application is approved, with most turnaround times being less than six days. There’s no free trial or demo, but you don’t have to commit to taking out the loan even if you’re approved.
| Pros | Cons |
|---|---|
| >Large number of potential investors >Proven track record of facilitating loan funding >Quick turnaround time to find out if you're approved | >For small businesses only, not individuals |
What Customers Are Saying
Funding Circle has several positive reviews online from users who credit the platform with helping them keep their business afloat during tough times. One user shared, “The service was great. All my questions were answered by a professional employee. During these uncertain times and with the threat of insecurity Funding Circle ensured stability. My business cannot thank you enough. Stay safe.”
Fundly
Fundly is a basic, easy-to-use crowdfunding platform that’s available to almost anyone. It’s free to open an account and start a project. Individuals, families, and nonprofits can all use this website to publicize their cause and solicit donations. Fundly shares that it has already helped more than 100,000 users gain funding for their causes. Like the other crowdfunding platforms on our list, Fundly is a web-based software service, but it also has an iPhone and iPad app that allows users to view and manage their donations. Fundly doesn’t have any fundraising requirements, but it does charge a 4.9% platform fee on whatever you raise, as well as processing fees.
| Price | Free Trial/Demo | Features |
|---|---|---|
| 4.9% platform fee + 2.9% processing fee + $.30/transaction | Free Demo Only | >Web-based software and iPhone/iPad app >Free account >Provides reports >More features at Fundly |
Pros & Cons of Fundly Crowdfunding Platform
Fundly is free and has no raise requirements, so there’s no downside to starting a crowdfunding project, especially if you’re an individual, charity, or nonprofit. However, the platform fee is somewhat pricier than other options. For those new to crowdfunding or fundraising in general, Fundly offers several guides to help you get started raising money online.
| Pros | Cons |
|---|---|
| >Allows you to incentivize potential donors or investors with rewards >Permits nonprofit fundraising | >Somewhat pricey platform fee |
What Customers Are Saying
In online reviews, users are satisfied with Fundly’s relaxed rules about starting fundraisers. One user said, “There is no maximum amount you’re allowed to raise on Fundly. There also is no minimum amount to raise in order to keep your funds like on some crowdfunding websites. Users can focus on their cause and getting donations for whatever amount they need without limitations.”
FundRazr
Launched in 2009, FundRazr is a crowdfunding and online fundraising platform with users in more than 40 countries. It has a unique take on pricing, offering a free version, a 5% platform fee, or a flexible platform fee in addition to payment processing fees. When users opt for the free version, they can still access all FundRazr’s tools, but their donors are asked for a tip to cover the platform fee on their behalf. For those choosing the 5% platform fee model, donors won’t be asked for a tip. In the flexible fee model, users can choose how much of the platform fee they’ll cover versus how much their donors cover through tips. Charities and nonprofit businesses that use the platform for multiple projects can choose different fee structures for each one.
| Price | Free Trial/Demo | Features |
|---|---|---|
| 0% platform fee + 2.9% processing fee + $0.30/donation 5% platform fee + 2.9% processing fee + $0.30/donation Variable platform fee + variable processing fee | Free Demo Only | >Web-based >Supports integrations >Allows debt or equity-based crowdfunding >More features at FundRazr |
Pros & Cons of FundRazr Crowdfunding Platform
FundRazr allows users a lot of flexibility in how much of the platform fee they’re responsible for. It also allows almost any type of fundraising, from traditional donations to debt or equity-based crowdfunding, and users can select a keep-it-all model or an all-or-nothing model. To be successful, however, it’s likely you’ll need to use social media to promote your fundraiser, and you must have a payment account with PayPal or Stripe to access donated funds.
| Pros | Cons |
|---|---|
| >Varying platform fees allow user choice >Free demo available, but only for organizations at this time | >Must have a payment account with PayPal or Stripe to access funds |
What Customers Are Saying
Fundrazr has some of the most positive online reviews of all the crowdfunding platforms on our list. Users generally praise its ease of use and excellent communication. One user commented, “Fundrazr was outstanding! Super easy to set up, use, and share. We met our goal in under 48 hours. Thank you Fundrazr for such an amazing app.” Another shared, “Excellent way of handling the data, the communication of the donors is direct and immediate. The results are immediate and fast without any problem.”
GoFundMe
When people think of crowdfunding, it’s likely that GoFundMe is one of the first companies to come to mind. GoFundMe is one of the world’s most popular crowdfunding sites. During the decade spanning 2010-2020, GoFundMe projects received more than $9 billion in donations from over 120 million donors. Part of the reason it’s so popular is that you can withdraw money while your campaign is still ongoing, and you can even have the donations deposited directly into your bank account. Many other platforms require you to wait until the campaign is closed to withdraw funds. The platform is also very user-friendly and flexible, so people can use it to raise funds for everything from medical expenses to graduation gifts and charitable causes. There are no limits on how much you can raise and no time constraints. Finally, GoFundMe is also well-known for its “Customer Happiness” representatives, who have a reputation for helping users quickly and efficiently if they have questions about the platform.
| Price | Free Trial/Demo | Features |
|---|---|---|
| 0% platform fee + 2.9% transaction fee + $0.30/donation | Free Demo Only | >Web-based >No time limits or limits on how much you can raise >Offers reports >More features at GoFundMe |
Pros & Cons of GoFundMe Crowdfunding Platform
If you’re an individual thinking of trying out crowdfunding for a personal need or cause, GoFundMe offers a low-risk way to start a campaign. For individuals in the United States and many other countries, using the platform is free, and it’s funded by optional tips provided by donors. It offers reports to keep you up to date on your campaign and doesn’t have limits on how much you can raise or time limits for your campaign. The main downside? There are so many campaigns on GoFundMe that you have to market your campaign well to make it stand out. Fortunately, that’s not hard to do since you can link directly to your fundraiser and share it with friends and family and on social media.
| Pros | Cons |
|---|---|
| >No platform fee; funded by optional tips >User-friendly interface | >With so many campaigns, you have to market yours to make it stand out |
What Customers Are Saying
While not every campaign is successful, users online seem to agree that GoFundMe is an easy-to-use, low-risk platform no matter what your fundraising needs are. One user complimented the site, saying, “GoFundMe is such an easy way to raise money for any cause you need raising money for. The website is easy to set up and they give you a link to your fundraiser that is easily sharable to other social platforms or can be directly sent to others.”
Indiegogo
When it comes to rewards-based crowdfunding, there are a few big platforms that have become household names. Indiegogo is one of them. Founded in 2008 in San Francisco, Indiegogo was one of the first crowdfunding sites available. It allows users to set up campaigns to ask for funds for an idea, charity, or start-up business. In return for their contributions, donors, investors, or customers who fund a project can receive a gift. For example, a new business might offer a product at a steeply discounted rate in exchange for a donation. The site is very popular, with more than 15 million visitors each month. Indiegogo also recently partnered with MicroVentures to offer equity-based campaigns, making it one of the few big platforms that permit unaccredited investors to participate in this type of crowdfunding.
| Price | Free Trial/Demo | Features |
|---|---|---|
| 5% platform fee + 2.9% transaction fee + $0.30/donation | Free Demo Only | >Web-based software >Supports integrations >Permits nonprofit fundraising >More features at Indiegogo |
Pros & Cons of Indiegogo Crowdfunding Platform
For users interested in starting a campaign, Indiegogo’s popularity makes it an appealing choice. Its website is fun to browse and easy to search, enticing potential donors into spending time looking for projects they might be interested in funding. The 5% platform fee might discourage some users, but a free demo allows you to try before committing to starting your campaign there. For donors, it’s important to keep in mind that contributing doesn’t mean you’re guaranteed to receive your reward. If donors fund an unsuccessful project, they may be disappointed if they don’t receive the product they expected.
| Pros | Cons |
|---|---|
| >Free demo allows you to try before committing >No monthly fees | >Donors may be unsatisfied if they fund an unsuccessful project and never receive their reward |
What Customers Are Saying
Online user reviews of Indiegogo reflect the gamble that donors make when they contribute to a project that may or may not be successful. While there are some negative reviews from people who were let down by their experience, many users say funding projects is fun and exciting. One donor shared, “I expect Indiegogo to be a platform where I can find worthy projects to fund. When you fund a project, it’s a high risk that you’ll lose all your money. It’s not a store. It’s not an investment. It’s putting your money into someone’s dream which might not materialize.”
Kickstarter
Another giant when it comes to rewards-based crowdfunding, Kickstarter is one of the most-used crowdfunding platforms worldwide. As of December 2019, Kickstarter users had received more than $4.6 billion in pledges from 17.2 million donors. The platform is brimming with cool and interesting films, music, board games, comics, journalism, video games, technology, publishing, and culinary projects. Kickstarter can accept donations from backers all over the world and charges a 5% fee on the total amount of funds raised, plus an additional payment processing fee. Backers provide funds in exchange for tangible rewards or experiences, but as with other rewards-based platforms, there are no guarantees that the reward will arrive on time, that it will meet donor expectations, or even that it will arrive at all.
| Price | Free Trial/Demo | Features |
|---|---|---|
| 5% of total funds raised + 3% processing fee + $0.20/pledge Pledges under $10 pay 5% processing fee + $0.05/pledge | None | >Web-based software >Email and phone support >Rewards-based crowdfunding >More features at Kickstarter |
Pros & Cons of Kickstarter Crowdfunding Platform
Kickstarter is a fun-to-browse and very well-known platform. Although almost any type of reward-based project can be offered there, the platform tends to be associated with creative projects having to do with the arts or pop culture. It provides access to reports that offer valuable info about your campaign so you can make tweaks if needed. There’s no free trial or demo, but it does offer a reduced processing fee for donations under $10 so you don’t feel nickel-and-dimed if you have a lot of small donations.
| Pros | Cons |
|---|---|
| > Reduced processing fee for small donations >Provides reports to keep you up to date on your campaign | >None |
What Customers Are Saying
In online reviews, donors agree that browsing and funding projects on Kickstarter is fun. One shared, “You know what you are taking on when backing a project, it may not come through and that’s a risk you have to take. In my experience, it has been very well worth it. I’ve backed some awesome projects and it’s really fun tracking their progress along the way.” Another praised Kickstarter for its focus on local businesses, saying “…You can view only those in your area which is nice because I like to support local businesses.”
Patreon
Patreon is an American crowdfunding platform that allows donors to support their favorite content creators. In an age where many people find their entertainment online, creators and artists are increasingly able to earn income by using services like Patreon to interact with their fans and provide rewards, perks, and other incentives in exchange for donations. Founded in San Francisco in 2013, Patreon is a popular crowdfunding site for more than 200,000 artists, writers, videographers, podcasters, musicians, and other online content providers. The platform offers three pricing tiers and charges anywhere from 5% to 12% of a user’s monthly income, depending on what tier they select.
| Price | Free Trial/Demo | Features |
|---|---|---|
| Lite: 5% of monthly income earned Pro: 8% of monthly income earned Premium: 12% of monthly income earned All plans: Plus 2.9% processing fee + $0.30/successful payment over $3 or 5% processing fee + $0.10/successful payment under $3 | None | >Specialized platform for supporting content creators >Supports integrations >Provides reports >More features at Patreon |
Pros & Cons of Patreon Crowdfunding Platform
For creatives and content providers, Patreon provides a service that can be potentially life-changing. By enabling fans to donate directly to their favorite artists, musicians, writers, and other professionals, Patreon has become a valuable source of income to the creative class. It has a flexible pricing structure that allows users to decide how much they’re willing to pay to gain access to more features and offers reports to help users track their monthly income. However, there’s no free trial or demo, and the lowest percentage, 5%, is still a relatively high commission rate.
| Pros | Cons |
|---|---|
| >Flexible pricing structure >Platform designed with content creators and fans in mind >Offers reports | >No one-time donations |
What Customers Are Saying
Fans like the ability to connect more closely with their favorite content creators and earn the chance to receive exclusive content and rewards. One fan shared, “Great service to support your favorite artists, freelancers, or whatever really.” Another fan commented, “I’ve been a patron for 2 years, and find them excellent at supporting two creators. I had no trouble at all making changes to my pledges, and deleting one of them when I didn’t receive an expected benefit.”
SeedInvest
SeedInvest operates primarily as an equity-based crowdfunding platform that gives companies direct access to accredited investors worldwide — if they can get past the platform’s strict vetting process. Only around 1% of companies are approved to join the SeedInvest platform. To have a chance, companies must be able to demonstrate proof of concept, have at least two full-time team members, and be legally incorporated as a business in the United States. SeedInvest uses the all-or-nothing model, so users are taking a risk that they may wind up with nothing if their project isn’t fully funded.
SeedInvest does have a maximum raise of $5 million, much higher than other equity funding sites. It’s also well above the average funding amount on the platform, which is $40,000. In addition to the all-or-nothing approach and the maximum raise, SeedInvest applies more pressure with a 60-day time limit to show that your company’s campaign is successful.
| Price | Free Trial/Demo | Features |
|---|---|---|
| Placement fee: 7.5% of amount raised Equity fee: 5.0% of amount raised (Paid if fundraising is successful) | None | >Equity-based crowdfunding platform >High $5 million maximum raise >Email and phone support >More features at SeedInvest |
Pros & Cons of SeedInvest Crowdfunding Platform
Gaining access to SeedInvest is a daunting task. Plus, even if your project is accepted, you have to deal with the all-or-nothing approach and a 60-day time limit that forces you to try to reach your goal quickly. However, SeedInvest does provide access to accredited investors and may be a great fit for a company that’s well-prepared and ready to present its case for funding.
| Pros | Cons |
|---|---|
| >Access to accredited investors >High maximum raise amount that shouldn’t impact most users >Difficult to gain access but less competition for investors once you’re on the platform | >60-day time limit may be too short for some startups >All-or-nothing model |
What Customers Are Saying
Many online reviews about SeedInvest are from investors. It’s interesting to gain insight into why investors are drawn to the platform. One shared, “It’s comforting to know that someone has done the due diligence on SeedInvest deals. I do have to spend a lot of time on the site sorting through profiles to find the few companies that are interesting to me, but then it’s easy to ask the founders questions and potentially invest.”
WeFunder
WeFunder is one of the largest companies to enter the equity-based crowdfunding field that allows nonaccredited investors to participate. To start a campaign, a U.S. corporation or LLC can create a profile for free and connect to more than 650,000 registered investors. WeFunder charges a platform fee of 7.5% of the total amount raised, but only if the project is successful. The platform has one of the lowest investment minimums among equity-based sites at just $100, allowing a larger possible pool of investors to contribute to your campaign. Any investor on WeFunder can participate in one of its Regulation Crowdfunding campaigns, but the platform also hosts Regulation D and Rule 506b campaigns for accredited investors only and Regulation A+ campaigns for later-stage companies seeking to raise amounts up to $50 million.
| Price | Free Trial/Demo | Features |
|---|---|---|
| 7.5% of amount raised if fundraising is successful | None | >Web-based software >Email and phone support >Supports integrations >More features at WeFunder |
Pros & Cons of WeFunder Crowdfunding Platform
With its low investment minimum and a large pool of nonaccredited investors, WeFunder is one equity-based crowdfunding platform that’s making an attempt to democratize the investing world. Almost anyone can start or invest in a campaign. Plus, even though there’s no free trial or demo, fundraisers don’t have to pay fees to WeFunder unless their project is successful, making this platform a less risky way to try out equity-based crowdfunding.
| Pros | Cons |
|---|---|
| >Permits nonaccredited investors >Low investment minimum of $100 | >None |
What Customers Are Saying
In online reviews for WeFunder, customers who’ve successfully funded campaigns praise the sense of community fostered by the platform. One user said, “We have funded two companies through Wefunder … The experience has been nothing but amazing … We have around 700 investors and it’s become an amazing community.”
What Are Crowdfunding Platforms?
Crowdfunding platforms are typically web-based software services that allow individuals, charities, nonprofits, and small businesses to start fundraising campaigns online. Crowdfunding platforms vary widely. An individual may use a simple donation-based platform to solicit funds for medical bills, while an artist or musician may use a rewards-based platform to ask fans to fund their new work in exchange for a free drawing or CD. For businesses, there are also debt-based platforms, which allow users to seek loans from a group of investors, or equity-based platforms, where small businesses or start-ups can look for seed money or funding to grow their business from investors interested in gaining a share of the company.
Benefits of Crowdfunding Platforms
Crowdfunding platforms offer users a way to consolidate their fundraising efforts and stay organized. They also offer users the opportunity to share a link quickly and easily through email, social media, or elsewhere online to solicit donations from a wide group of people. Many crowdfunding platforms also offer fundraising and marketing tips to help make campaigns more successful. In addition, these platforms give users access to networks of donors or investors, which can lead to new fundraising sources and create a sense of community.
Must-Have Features for Crowdfunding Platforms
With so many crowdfunding platforms to choose from, it’s helpful to know what features are important based on the type of fundraising you’re trying to accomplish. A high school student trying to raise funds for their school band is going to have very different needs than a small business trying to launch its first product or a charity managing a multilevel fundraising campaign. However, crowdfunding platforms offer solutions for all these users. Here are some of the features you want to look for when choosing a platform:
- More than one type of crowdfunding: Crowdfunding platforms often offer more than a way to simply donate. There are also rewards-based, equity-based, and debt-based crowdfunding models. A platform that allows more than one type of crowdfunding will be more versatile.
- Payment options: To maximize your fundraising, look for platforms that allow one-time donations, multiple payment methods, and easier access to your raised funds. Platforms that only permit donations via a few payment options won’t attract as many users. Make sure you know what you’re committing to if you choose a platform that requires a subscription. You should also be aware that some platforms give you access to funds as they’re raised while others hold your donations until your campaign is complete.
- Reports: Look for a platform that provides regular reports to help you keep track of how your campaign is progressing. This is especially important if the platform has any particular fundraising requirements, such as donation minimums or maximums, total fundraising minimums or maximums, or a time limit in which to raise your funds. Keep in mind that some platforms, known as all-or-nothing platforms, will refund your donations unless you meet your goal. If that doesn’t work for you, look for a keep-what-you-raise platform instead.
The Cost of Crowdfunding Platforms
Crowdfunding platforms vary greatly in cost. Some of the most popular platforms are free to use and are funded by optional tips from donors. Others require a monthly subscription fee to access the platform or take a set percentage of the total amount you raise every month or at the end of your campaign. This percentage can vary from around 1% to more than 10% depending on the platform.
Because almost all donations are made by credit card, nearly every crowdfunding platform also charges payment processing fees, which are typically around 3-5% plus $0.30 per transaction. If you’re just starting out with crowdfunding, consider trying a free platform or one of the platforms that only charge a fee if your campaign is successful.