In terms of raw numbers, GoFundMe (see our review) stands atop the crowdfunding industry. With over $5 billion in crowdfunded dollars raised from over 50 million donors since its founding in 2010, no crowdfunding platform has been able to match GoFundMe in terms of transferring money to those who need it. What’s more, since late 2017, GoFundMe has started eliminating their 5% platform fee for individual crowdfunding campaigns (the 0% platform fee now applies to campaigns started in the US, UK, and Canada).
However, there are plenty of reasons why an entrepreneur looking to crowdfund a startup or a small business might look for an alternative to GoFundMe. While people can and do use GoFundMe to fundraise for businesses, the vast majority of campaigns on the site are personal campaigns for charitable causes, often to cover medical expenses. Facilitating commerce isn’t the focus of GoFundMe’s brand.
Let’s go through some of the GoFundMe alternatives you can use to fund your business.
Kickstarter (see our review) needs no introduction, but I’ll write one anyway out of habit. Between Kickstarter’s 2009 birth and today, the company has become synonymous with crowdfunding. Kickstarter has raised over $3.5 billion in funding pledged to its campaigns (more than any crowdfunding site besides GoFundMe), boasts more thanÂ 140,000 successfully funded projects withÂ over 14 million total backers.Â You might say the folks at Kickstarter have hit the big time.
Kickstarter embodies the concept of rewards crowdfunding: crowdfunding in which backers support campaigns and receive rewards in return, typically in the form of the product being produced.
Kickstarter helps artists, musicians, filmmakers, designers, and other creators find the resources and support they need to make their ideas a reality.
Thus reads Kickstarter’s About page. It sums up Kickstarter’s target audience: those in the business of creating things to share with others. For instance, Kickstarter almost single-handedly spawned the current “golden age” of tabletop games. Game makers found Kickstarter to be the ideal platform from which to launch their passion projects. Tech startups have hit paydirt on the platform as well.
How Does Kickstarter Work?
Kickstarter’s product on offer is its rewards crowdfunding platform. The details of the platform are as follows:
- Campaigns can be open forÂ 30 to 60 days
- Campaigns are all-or-nothing — you either meet your funding goal by the time your campaign ends, or you get no funds whatsoever
- A 5% platform fee is taken from what you raise
- AÂ 3% +Â $0.20Â payment processing fee is taken from each pledge made to you
Kickstarter has five rules for projects:
- Projects must create something to share with others
- Projects must be honest and clearly presented
- Projects canât fundraise for charity
- Projects canât offer equity
- Projects canât involveÂ prohibited items
Pay special attention to the first rule. In order to host a Kickstarter crowdfunding campaign, you must offer rewards to your potential backers. It’s not optional. Furthermore, these rewards must be of your making and must relate to your project. They can’t just be whatever you have sitting around the house.
How To Start A Kickstarter Campaign
Go to the website, choose a category, enter the basic details of your project into the form, and confirm your identity. When you submit yourÂ project for review, you might pass the automated check and be able to start immediately, or your project might be flagged for additional screening, which can take up to three days. Kickstarter estimates that about 80% of submitted projects are accepted.
Hobbyists, tech geeks, and superfans continue to demonstrate their willingness to spend money on crowdfunding projects in order to get in on The Next Big Thing, and Kickstarter is the best-known place to do just that. Their track record of crowdfunding success is second to none. It’s very competitive, though, so you best have done your due diligence prior to launch. If you have, who knows? Your project could take off on social media and become the next great cultural phenomenon; the next viral dream that captures the imagination of a generation; the next RompHim.
I only pray you experience such spiritual validation in your lifetime. Kickstarter: Catch the fever!
Read our full Kickstarter review
Visit the Kickstarter website
Indiegogo (see our review) was launched at the Sundance Film Festival in 2008. It was originally conceived as a crowdfunding platform for independent films. Soon thereafter, Indiegogo expanded its mission, and is now a leader in the crowdfunding industry. Indiegogo’s rewards crowdfunding platform is more flexible and less exclusive than that of Kickstarter, as Indiegogo doesn’t prescreen projects prior to launch. Many startups have found success on Indiegogo after being rejected by Kickstarter.
Indiegogo also hosts equity crowdfunding campaigns through a joint venture with MicroVentures (see our review). Equity crowdfunding means your backers are purchasing shares in your company — they aren’t just backing you to get a t-shirt or a board game. Because equity crowdfunding involves investing, it is much more heavily regulated than rewards crowdfunding. Unlike Indiegogo’s rewards crowdfunding campaigns, the requirements to launch an Indiegogo equity crowdfunding campaign are fairly stringent. The bulk of Indiegogo’s business is on the rewards crowdfunding side.
Indiegogo appeals to a lot of the same entrepreneurs and creators as Kickstarter. Tech, games, and the arts (particularly movies, no surprise) are well represented in Indiegogo’s campaign listings. But because Indiegogo doesn’t curate its campaigns the way Kickstarter does, a broader array of businesses can fundraise successfully with Indiegogo.
How Does Indiegogo Work?
Indiegogo’s rewards crowdfunding platform carries the following conditions:
- Campaigns can last up to 60 days
- You can choose a keep-what-you-raise campaign (you keep what you raise whether you meet your funding goal or not) OR an all-or-nothing campaign
- 5% platform fee
- 3% + $0.30 payment processing fee (per pledge)
Indiegogo doesn’t restrict entry to its platform — you can start a campaign for just about any non-charitable purpose. Unless you’re later found to be operating a fraud or otherwise violating the terms of service, you’re good to go. And unlike Kickstarter, Indiegogo doesn’t mandate that you offer rewards. They do highly recommend it, however. Campaigns that don’t offer rewards have a tendency to fail.
How To Start An Indiegogo Campaign
Just go to Indiegogo’s website, click “Start A Campaign,” detail your campaign, and launch it!
Indiegogo’s welcoming approach and flexible campaigns make it an excellent crowdfunding choice for businesses and artists of all stripes.
Read our full Indiegogo review:
Visit the Indiegogo website
Patreon (see our review) may be a rewards crowdfunding site, but compared to the likes of Kickstarter and Indiegogo, Patreon is a beast of a different nature. Launch an Indiegogo campaign, and it’s a one-time deal. Once your campaign ends after 30 or 60 days, you get what you get, and that’s that. But with Patreon, your campaign is continuous. It doesn’t end unless you end it. Patrons sign up to support you on a recurring basis (eitherÂ per-month orÂ per-creation), somewhat akin a subscription service. In return, you provide your patrons exclusive content. Founder and musician Jack Conte discussed his motivations in a 2013 article:
âIâm releasing new things on a monthly basis. I have friends releasing material weekly,â Conte said. âTheyâd have to almost invent an excuse to raise money after going on Kickstarter once. Weâre saying, âNo, no. Donât make up a new endeavor. Keep doing what you do best and let people pay you each time you do that.â
Those in the business of creation will find Patreon an ideal crowdfunding platform. Game designers, journalists, musicians, comic book artists, and YouTubers are all to be found, though podcasters have had particular success on the platform. From Chapo Trap House to Sam Harris to everything in between, Patreon has been a boon to podcasters.
One thing Patreon has allowed in the past that most crowdfunding sites haven’t is a certain degree of adult content, though that has been changing as of late.
How Does Patreon Work?
These are the terms of using Patreon:
- Funding duration is unlimited
- Can charge patrons per month OR per creation
- 5% platform fee
- ~5% payment processing fee
As long as you don’t violate the terms of service (which are more relaxed than those of many competitors), you should be fine.
How To Start A Patreon Campaign
Sign up online, fill in the form fields, and poof, you’re in!
If creation is your business and GoFundMe doesn’t quite fit what you do, Patreon and its innovative brand of continuous rewards crowdfunding provide a means of monetizing your work.
Read our full Patreon review
Visit the Patreon website
FundRazr (see our review) refers to itself as “Canada’s leading crowdfunding platform.” Though that places it well behind the likes of Kickstarter in regards to total money raised, FundRazr distinguishes itself by having an exceptionally good reputation for a crowdfunding site among both donors and campaigners. I had a hard time finding comments from user upset with the product. This is most definitely not the case with most of the competition!
FundRazr hosts a wide variety of personal and charitable crowdfunding campaigns, though they host business campaigns as well (and not just in Canada).
Pretty much any business with something to offer backers can make use of FundRazr.
How Does FundRazr Work?
This is what a FundRazr crowdfunding campaign entails:
- No mandatory time limit for campaigns
- Keep-what-you-raise OR all-or-nothing funding — your choice
- 5% platform fee
- 2.9% + $0.30 payment processing fee (per pledge)
FundRazr doesn’t prescreen campaigns, nor does it have any particular bent as to what sort of businesses it favors. And while business campaigns should offer rewards, it isn’t mandatory.
How To Start A FundRazr Campaign
Create an account, fill in the details, and you’re on your way.
FundRazr isn’t the most high-profile crowdfunding service in the business, but its exceptional reputation for treating people well makes it worth considering for the startup in need of funding.
Read our full FundRazr review
Visit the FundRazr website
The name resembles FundRazr, but this is a very different platform. Ohio-basedÂ Fundable (see our review) is a crowdfunding platform exclusively for businesses. Fundable hosts both rewards and equity-based funding campaigns. Rather than charge a platform fee to users, Fundable charges a monthly fee of $179 to all campaigners. It’s a system that favors serious startups and early-stage companies over small-time artists and creators.
Fundable has sent $411 million in crowdfunded dollars to businesses thus far. Not too shabby at all.
Fundable hosts crowdfunding campaigns for a wide variety of businesses, though tech, food service, and healthcare companies are particularly well-represented.
How Does Fundable Work?
Fundable lets you launch both rewards and equity crowdfunding campaigns, though not both simultaneously. Some businesses start with a rewards campaign and, once successful, use the campaign’s success to demonstrate the product’s viability in the market to investors, thus laying the ground for an equity campaign.
Here’s how Fundable campaigns work:
- No mandatory time limit for campaigns
- All-or-nothing funding
- $179 monthly fee
- 3.5% + $0.30 payment processing fee (rewards campaigns only)
Given the monthly fee and all-or-nothing funding, if your campaign is unsuccessful, you won’t just have raised nothing — you’ll have spent money in order to raise nothing. Try not to fail!
Though just about any business can apply to use Fundable, the company prescreens every campaign profile submitted before allowing it onto the platform. A poorly-resourced startup may have better luck using a site with no barrier to entry, like Indiegogo, to crowdfund.
How To Start A Fundable Campaign
Fill out the online application, submit it, and wait for an answer from the company.
Fundable’s terms and fees make it tough for the little guy, but a startup with high growth potential stands to benefit from the absence of the 5% platform fee many crowdfunding sites impose. After all, if you raise $50K, well, 5% of $50K is a lot more than Fundable’s $179 monthly fee!
Read our full Fundable review:
Visit the Fundable website
Wefunder (see our review) has been an innovator in the equity crowdfunding space. A purely business-oriented crowdfunding platform. Wefunder hosts equity campaigns in which non-accredited investors can invest (this is known as Regulation Crowdfunding). The term “accredited investor” basically just means “rich person,” so by allowing non-accredited investors (i.e. everyone) to invest, you’re casting a wider net in your hunt for investors, so to speak.
Equity crowdfunding with non-accredited investors has only been legal since May 2016, but so far, Wefunder holds 50% of the market share in Regulation Crowdfunding. It’s a new field, but Wefunder has it figured out more than anybody.
Wefunder hosts funding campaigns for many different business types (particularly craft breweries), but as equity crowdfunding is harder to pull off for unless your project already has some resources behind it, Wefunder is best for startups whose high-profit potential is apparent to investors. In fact, Wefunder states that of the 174 companies that have hit their funding goal on Wefunder’s site,Â âmost are alumni of Y Combinator.â The cream of the crop, in other words.
How Does Wefunder Work?
Wefunder offers equity crowdfunding under the following terms:
- 1-year funding limit
- All-or-nothing funding
- $195 one-time fee
- 7% platform fee
- No payment processing fees (all funds are transferred offline)
The 7% platform fee seems a bit high, but consider that with most crowdfunding sites, an additional 3-5% goes to the payment processor, making that apparent 5% platform fee more like 8-10%. Wefunder doesn’t handle online payments, so there are no processing fees to be paid.
Wefunder allows just about any applying company onto its site. The company doesn’t do the heavy vetting that other equity crowdfunders engage in.Â Wefunder recommends having at least one experienced investor endorse your campaign and set the terms of your raise, but that’s not a requirement.
How To Start A Wefunder Campaign
Just apply online on the website.
Wefunder is one of the few crowdfunding companies with a track record of success in Regulation Crowdfunding. Startups with high growth potential have reason to take a closer look.
Read our full Wefunder review
Visit the Wefunder website
The forgettably-namedÂ Crowdfunder (see our review) is unapologetic about being an equity crowdfunding platform for “high-impact ventures” only. Crowdfunder’s equity campaigns are open to accredited investors only, meaning that you’ll be drawing from a smaller, richer, and likely more selective pool of investors than with Wefunder. (Note that the British rewards crowdfunding site named Crowdfunder is an entirely different company)
$160 million in investment commitments have been made via Crowdfunder.
Crowdfunder has specific ideas about the identity of its target audience:
Crowdfunder is designed for early-stage startups and more mature businesses raising seed stage, Series-A & Series-B funding. Our offering does not cater to inception stage companies at this time.
Tech, software, and investment companies comprise many of the businesses using Crowdfunder
How Does Crowdfunder Work?
Here are the details of Crowdfunder’s platform:
- No mandatory time limit for campaigns
- Keep-what-you-raise funding
- $449-$749/month subscription fee (depends on your subscription package)
- No platform fees or payment processing fees (funds are transferred offline)
Crowdfunder’s monthly subscription fees are high. No getting around it.
You can set up a profile for free, but in order to actually start your equity campaign, Crowdfunder will have to approve your plans.
How To Start A Crowdfunder Campaign
Sign up and apply through the website, silly.
If your startup company has boundless potential in the eyes of investors, Crowdfunder is a very intriguing prospect. Though the monthly fees are high, they’ll be worth it in the end if you raise a significant sum, as Crowdfunder campaigns don’t carry a percentage platform fee.
Read our full Crowdfunder review
Visit the Crowdfunder website
Headquartered in Paris,Â Ulule (see our review) is one of Europe’s largest rewards crowdfunding platforms. It’s not widely known in the US, but if you’re in North America and your project appeals to the European market, it’s definitely a crowdfunding site to consider.
Ulule distinguishes itself with what it claims is the highest rate of successful campaigns for any crowdfunder: 65%. The company attributes this to its focusÂ on personalized coaching, which it provides to all campaigners. Indeed, Kickstarter’s success rate is approximately half that of Ulule!
Any sort of business can campaign on Ulule, though art-related startups seem to do particularly well.
How Does Ulele Work?
Ulule’s crowdfunding campaigns are structured like so:
- Campaigns can last up to 90 days (45 is recommended)
- All-or-nothing funding
- Platform fees: 6.67% of all funds received via creditÂ card, 4.17% of funds received via check or PayPal
- ~3% payment processing fee
Ulule’s fee structure could stand to be less complex.
Launching a Ulule crowdfunding project requires passing two validation stages. Ulule really wants to make sure your plan is solid before letting you loose on the platform. If you are ultimately accepted, you’ll be assigned a “success manager” to help you with every stage of your campaign. Compared to most of the competition, particularly in the rewards crowdfunding space, Ulule is quite hands-on in its approach to campaigners.
How To Start A Ulele Campaign
Write Ulule an essay explaining why you think you’re worthy of their platform and send it to them in the mail.
I kid, I kid. Just apply online.
Ulule does things differently than most of the crowdfunding sites on this side of the pond. More consultation, more guidance. Does this approach jibe with your needs? If your company produces things that have Continental appeal, give Ulule a closer look.
Read our full Ulule review
Visit the Ulule website
Republic (see our review) is, like Wefunder, a Regulation Crowdfunding platform — an equity crowdfunding outfit open to any and all investors.
Founded by AngelList alumni and considered to be an AngelList spinoff, Republic stands out for its public commitment to social justice. The company’sÂ About page details their intention to help level the playing field when it comes to capital by prioritizing women, minorities, and others who the investing world has historically overlooked.
Republic may have egalitarian aspirations, but equity crowdfunding is nonetheless best suited to companies with uniquely high-profit potential.
How Does Republic Work?
Republic’s equity crowdfunding campaigns are structured as follows:
- 1-year funding limit
- All-or-nothing funding
- 7% platform fee
- 3.5% payment processing fee for payments made via credit card
Companies applying to Republic undergo a thorough evaluation before being allowed to raise funds. The following factors will be taken into consideration:
- Experience of founders and management team
- Products, services, and market
- Revenue and growth
- Customer base and demographics
- Fundraising needs
- Offering terms
- Business plan
- Financial health
- Recordkeeping procedures
How To Start A Republic Campaign
Just apply online through the website.
Being an AngelList spinoff, Republic is already making waves in the equity crowdfunding world. Does its idealistic outlook match reality? The years to come should give us our answer. In the meantime, if you run an exceptional startup and you come from a historically-underserved community, Republic wants your attention.
Read our full Republic review
Visit the Republic website
And now for something completely different.
Kiva US (see our review) doesn’t offer rewards crowdfunding or equity crowdfunding. What the heck do they do, then? They offer debt crowdfunding, otherwise known as crowdfunded loans. Kiva US is a nonprofit entity, and the crowdfunded loans it offers carry 0% interest. Not bad, eh? It may be the only platform in which lenders stand to make no profit whatsoever. Kiva’s mission is to open up the lending world to businesses that would otherwise struggle for funding. If you need $10K or less for your business and are willing to wait a bit for your money, Kiva’s crowdfunded loans just might be for you.
Absolutely any sort of business can apply for a Kiva US crowdfunded loan.
How Does Kiva US Work?
Here are the details of Kiva’s crowdfunded loans:
- Borrowing amount:Â $25 â $10K
- Term length:Â 6 â 36 months
- 0% interest
- Time to funding: 1-3 months
Kiva US Rules
The only requirement to receive a Kiva US loan is that you put the money towards business expenses.
How To Apply For A Kiva US Loan
Yes, you apply online, but that’s only the first step to getting a Kiva loan. The entire process is as follows:
- Fill out an application online
- EnterÂ the approval stage
- EnterÂ a 15 day private funding period
- Enter a 30 day public funding period
- Get funds within 5 â 7 days
The process takes a while — certainly longer than with other lenders — but then again, crowdfunding with rewards/equity is hardly an instantaneous process either.
If you own a business, you need less than ten grand, and you want a loan you won’t have to pay interest on, Kiva US is your only funding option. Assuming you can wait a while before seeing any funds, there’s no reason whatsoever not to give it a shot.
Read our full Kiva US review
Visit the Kiva US website
If you find yourself looking for a crowdfunding site with more business-specific features than GoFundMe, the ten companies I’ve mentioned are all solid possibilities, depending on the nature of your business, its potential, and whether you want to offer rewards, equity, or debt payments with interest to your potential backers. Consider what makes sense for your business, then make the jump while you can! Your ideas won’t stay ripe indefinitely. Don’t wait too long!
The post GoFundMe Alternatives: 10 Sites Like GoFundMe For Business Funding appeared first on Merchant Maverick.