Crowdfunding via online platforms is a relatively new concept, but it has the potential to be a powerful tool for any small business. With the help of strangers who are interested in your company or your products, a clever entrepreneur can take advantage of the opportunity that crowdfunding offers to generate funds for new ventures. Below are some the most promising and well-regarded crowdfunding platforms that every small business should pay attention to.
Kickstarter is nearly synonymous with crowdfunding, and for good reason. Kickstarter offers the largest audience, the most potential exposure for your project, and the highest chance of successful funding. However, there are some caveats. The approval process is much stricter than other crowdfunding platforms, meaning that your campaign is likely to be rejected if it doesn’t fall within specific guidelines. As well, Kickstarter can’t be used to fund a business in the broadest sense; instead, it can be used as a way to fund research and development related to specific products or technologies. Finally, funding is not awarded unless the project meets its funding goal, regardless of how close you get, which makes Kickstarter as riskier prospect for some projects.
Unlike Kickstarter, IndieGoGo can be used to fund anything and everything, and there is no formal review process required to set up a campaign. This makes IndieGoGo one of the most versatile crowdfunding options for any small business, since it can be used for anything from startup capital to production costs. However, this also means that IndieGoGo campaigns stand a much higher chance of being unsuccessful, since the audience is much smaller and more spread out. IndieGoGo is available worldwide, making it ideal for international businesses, and the platform also eliminates the stress and frustration involved with an all-or-nothing funding system.
RocketHub is an interesting crowdfunding alternative that offers several unique benefits. Through a partnership with A&E Project Start Up, RocketHub has the potential to offer increased visibility and extra support, and the platform’s Success School provides resources to help you optimize your campaign. The downside of RocketHub is that traffic is significantly lower than most of the other top crowdfunding platforms While this means that there are less campaigns to compete with, it also means there are fewer people willing to help fund your project.
Patreon is unique in that it operates on a subscription-based funding model–in other words, supporters pay a small set amount each month instead of donating a single lump sum. This also means that many small businesses aren’t going to be well-suited to Patreon. However, if your business involves consistent, long-term content output, it may be worth considering Patreon for your crowdfunding needs. Entrepreneurs involved in the arts, such as fledgling music labels, independent presses, or visual artists, are ideal candidates for the kind of funding that Patreon provides.
Unlike other reward-based crowdfunding platforms, Crowdfunder operates on an investment model. This means that funds for your business are raised in exchange for equity or promise of future return. Currently, only accredited investors are able to provide funding though Crowdfunder, making it the most restrictive option, but it also means that it has enormous potential for any small business project with high funding goals.
While some platforms are more suitable than others for certain projects, virtually any small business can use crowdfunding as a way to generate funds. Whether your goal is to launch a startup, raise money for research and development, or increase production, the crowdfunding platforms above are a great place to find supporters.