What You Should Know About Choosing the Right Crowdfunding Platform
Its been said that crowdfunding is now the fastest and most effective way to raise funding for a project of any kind. And It’s true. Crowdfunding campaigns offer an immense financial incentive to creators but at the same time, they also provide invaluable metrics and insight. That is to say, crowdfunding is not just a financial aid but also an excellent way to gauge interest and test the waters for a new product or objective without being exposed to any financial risk.
But with so many options out there, how can you choose the right crowdfunding platform?
What You Should Consider When Choosing the Right Crowdfunding Platform.
You see, not every crowdfunding platform is as good as the next. Some platforms apply more fees while others are simply more relevant depending on the objective of the project.
Now, that’s not to say you will not find success on most crowdfunding platforms but rather that you should take time to understand why some are better than others. For example, processing fees can really add up over time and when you add platform fees to the mix, this is a rather large dent in the amount being raised. Needless to say, you want to minimize these fees as much as possible and ensure that you have full access to the fund after putting so much work into the process.
On the other hand, some platforms are quite basic next to others. That is to say, you will find that certain platforms offer excellent tools for marketing and measuring important metrics. In many ways, this is probably the best way to decide between platforms after taking the associated fees in to account.
With this in mind, let’s take a closer look at five crowdfunding platforms that you might consider for your upcoming project: 5 Crowdfunding Platforms to Consider for Your Project.
Kickstarter is the largest crowdfunding platform in the world. The platform is responsible for more than $3.5 billion in successful crowdfunding campaigns. As you may know, funding is only achieved if the goal of the project is achieved within a specific amount of time.
However, Kickstarter is best suited to filmmakers, artists and designers as opposed to environmental or charity related projects. Also, funding is returned to the backers if the project does not reach a certain target and this can prove incredibly frustrating for creators. After all, this means that all of your work can go to waste and leave you with no option but to forget the idea or start again.
Takeaway – Although Kickstarter has a large community and plenty of reach, the platform also takes 5% of the amount raised and applies processing fees of more than 3%.
Indiegogo is slightly unique in a sense that the website is also a marketplace. For this reason, the platform is best suited to crowdfunding for tangible products or items that you might find on Amazon. Unlike Kickstarter, Indiegogo does not set a specific time frame which means that the campaign can continue raising funds until the objective is achieved. Similarly, there is no precise targets and you can even entice potential backers through revenue sharing for the end product.
Takeaway – Indiegogo is great for product related campaigns and includes some nice features like the above mentioned revenue sharing. However, the platform also charges 5% for every project.
Fundpey is a cause-driven crowdfunding platform which allows creators to access their funds at any time. While Fundpey is committed to many environmental and social concerns and uses the brand to create awareness for pressing issues, it is a full fledged crowdfunding site. From technology to the arts, food to health issues, Fundpey has a category to include everyone. Fundpey’s platform is free to use, and charges 5% of the gross plus 2.9% for the credit card fee. The campaign creator keeps 92%. As if that’s not enough, Fundpey also includes some extremely valuable tools and features that can excel the project when it comes to marketing. For example, you can use a concise dashboard to measure and improve social media promotions which is most often the foundation of every successful crowdfunding campaign. Plus there is the “keep all you make feature” that lets the campaign owner keep everything they earn.
Takeaway – Fundpey is a very ethical platform and offers value at every turn with an excellent dashboard and immediate access to funds.
Patreon takes crowdfunding and transform backers into regular streams of revenue. That is to say, most projects have a base of “Patrons” who pay a monthly fee in return for certain exclusive benefits. In this sense, Patreon is useful to YouTubers and bloggers in particular, for these people can receive regular contributions in return for the content which they create.
At this time, Patreon continues to take 5% of all payments but the truth is, this platform is not best suited for once-off projects.
Takeaway – Patreon is a reliable source of regular income for certain individuals.
You may not know about Fundly but the platform has taken significant steps into the crowdfunding industry in recent times. Featuring a nice dashboard and easy-to-use website, this is also one of the more user-friendly platforms for crowdfunding. That being said, the lack of restrictions on Fundly is arguably the most impressive feature with as little as 48 hours required for withdrawals. However, Fundly also requires a 5% platform fee and 3% on every transaction.
Takeaway – It may not be as impressive as Funpey but at least Fundly provides quicker access to funds than the likes of Kickstarter and Indiegogo. As already mentioned, crowdfunding is an excellent way to gauge interest in a project but at the same time, fees and finance are what make these platforms so valuable. For this reason, it’s important to check the terms before signing up and make sure that you get the best return on the time you invest. More importantly, the process is often just as important as the money and there is always reward for choosing a platform that will provide a smooth process and few restrictions.
Whatever platform you choose for your crowdfunding campaign, Be sure that you have a plan in place before launching. Most sites will give the creator plenty of advice on running the campaign. Here are some tips on how to begin your crowdfunding journey.