Best Crowdfunding Sites

Restrictions

Crowdfunding sites can be selective about the types of projects they permit, and consumers must understand any limits a platform sets. Even if the site does not have restrictions, per se, you could still find yourself being ignored because persons who go to these sites—whether by invitation or simply to browse—are going there with a certain type of campaign they have in mind to support. No matter how great your campaign is, you probably won’t be able to covert those site visitors to paying backers.

• Type of platform: Niche sites are great for project creators because they exist only to support one type of campaign. Project creators save much time and effort, as well as disappointment later on, by using a site that fits best. Project creators, therefore, must choose a platform that supports their project type. On DonorsChoose.org, for example, you must be a teacher raising money for your classroom, and agree to restrictions about what happens with the materials if you leave the school.
• Limitations: Some platforms, such as “all-or-nothing” sites, have limitations such as caps on the minimum that can be raised in order to collect, or whether investor return is allowed, the latter of which is known as equity crowdfunding.

Ease of use

A "user-friendly" platform is important for both project organizers and potential donors. Because crowd funding is a fairly new concept, you should select a user-friendly platform. Platforms with clear and concise content ensure that potential backers won’t leave the page because they have unanswered questions.

• Skills knowledge: If you don’t have coding skills look for a website with a simple user interface. If you are comfortable writing code, you can use a platform that allows users to customize.
• Payment methods: The easier it is for donors to give money, the more financial potential a project has. Sites that allow a wide range of payment methods expand its user pool.

Social media integration

Being able to quickly and efficiently share a crowdfunding project with the masses is one key to success.

• Sharing: Crowdfunding platforms that offer tools for sharing through Facebook, Twitter and other social media platforms offer advantages. Many platforms, for example, strongly encourage project creators to make a short pitch video to illustrate their product or idea and allow them to make a personal connection with potential backers. YouTube integration is especially helpful because a project creator can amplify the campaign’s message, which helps build its audience. Other sites, usually cause-and non-profit related, offer little advice for using social media or help in advancing the value of pitch videos. Find a site that offers the level of support you need based on your project.
• Built-in visibility: Certain platforms more heavily use their own blog posts, staff picks and social media accounts to highlight projects, while others rely on algorithms to bring attention to the most “buzz-worthy” projects.

Fees

While not all crowdfunding platforms collect campaign fees, most do. Make sure you understand the fee system before creating a campaign. Be aware that you often have to pay even if the project doesn't meet fundraising goals. Also, remember to consider “hidden fees,” such as the cost of packing and shipping products, and include that in your funding goal total.

• Success fee: Some platforms charge a lower percentage of the money raised if a project meets its goal. Others charge only if and when the campaign exceeds a certain dollar amount.
• All or nothing: When a project fails on certain platforms, it loses all of the money it raised. Other platforms, known as flexible funding, allow projects that do not meet their funding goal to keep their money anyway.

Administrative work

Record-keeping and other administrative tasks eat up a lot of time, especially when you are starting a new project. A number of crowdfunding platforms provide management tools to do some of that work for you.

• Automatic email: Crowdfunding platforms often include automatically emailed receipts to donors. A small few have automatic updates to the fundraising ticker as more money is raised.
• Project management: Some platforms offer the benefit of tracking campaign success by integrating powerful tools such as Google Analytics. This information helps users track exactly where funding originates. External analytics tools also exist for the same purpose. While some offer an analysis of your campaign alone, other tools compare yours to other similar campaigns from a variety of platforms.
• Extras: Some platforms offer enhanced administrative tools such as an account manager tool, rewards fulfillment, and sales integration.

Reputation

Check the success rate of projects similar to yours to make sure a platform is a good choice. You can do this by looking at forums or searching online for complaints about the platform.

• Project success: While there are a number of factors that lead to success or failure, higher project success rates is an indicator that a platform matches the targeted audience.
• Stability: New platforms appear all the time, so you should research the background of an organization. Make sure you can answer the following questions about a platform before you create a campaign: who are its backers and investors, what is its financial model, and what are others users saying about the site?

Donation crowdfunding

Donation-based platform let people give money without offering tangible rewards. People fund projects on these sites because of the satisfaction of knowing they’re contributing to a worthy cause. Such platforms are common with nonprofits and for causes such as helping students across the globe, funding overseas infrastructure projects, and even helping individuals pay for devastating medical expenses due to illness or accidents.

Rewards crowdfunding

These projects promise backers a tangible "thank you" such as a T-shirt or a gadget in exchange for backing it. Often they are “pre-selling” a product or service without sacrificing company equity, meaning backers receive no ownership stake in the projects they support. All ownership and copyrights remain with project owners. Whether a backer gets the reward when the funding goal is not met depends on the specific platform's rules. Fixed funding sites do not require that you fulfill rewards, though you do return money to backers. In flexible funding, however, the expectation is still reward fulfillment.

Equity crowdfunding

On sites that have equity crowdfunding, investors pledge money in exchange for equity or shares in the company.

Debt crowdfunding

Campaigners on debt crowdfunding sites ask investors to loan them money, and then repay them on a fixed repayment schedule with a specified interest rate during the term of the loan.

Flexible and fixed funding

Crowdfund sites may offer only flexible or fixed funding, or the sites may give campaigners the option to decide which type of finding they want. Flexible funding allows a campaign to keep contributions, while fixed funding returns money to donors. Campaign creators should weigh their options seriously because, even though they can keep funds regardless of whether they reach their goal, with flexible funding they will still be responsible for fulfilling rewards. Since crowdfunding thrives on trust, an additional consideration for opting for flexible funding is that if you keep the money but never create the product or complete the service to which you promised, backers may become disgruntled.

Individuals

Those who want to raise money for a special event, like a honeymoon, or need financial assistance with an unexpected expense, such as a pet's surgery, can do so on several crowdfunding platforms. Friends and family can also set up projects that help a loved one with medical expenses or accomplish a goal.

Non-profits/community activists

Those looking to raise money for a good cause can use crowdfunding sites to solicit funds from like-minded individuals. This group might include teachers raising money for their classrooms, individuals and groups seeking donations for volunteer trips and charities seeking new revenue streams. Some platforms allow groups to have a permanent presence to continually generate revenue.

Entrepreneurs

Startups and/or existing businesses can use crowdfunding to get consumer validation before they commit big money. No matter the size of the company, crowdfunding is frequently used as an alternative avenue to replace traditional venture capital money or unattainable bank loans.

Creatives

The original early adopters of crowdfunding, artists such as writers, gamers, and filmmakers, continue to capitalize on this new source of revenue. They are more likely to get support on certain crowdfunding platforms than on others.