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The Best Crowdfunding Sites For Your Startup In 2021

What is crowdfunding, and how do you crowdfund your startup business?

March 25, 2021 · Jacques Nørbo

Crowdfunding is one of the newer ways to fund a business, and In recent years it’s become a popular choice when it comes to raising money for startups. You probably heard of it, but do you know how it works? If not, we’ve got you! Here is a short guide to how you get started with crowdfunding your startup. Let’s start from the top! 

What is Crowdfunding?

As opposed to raising a large amount of money from a few sources, you’re raising small amounts of money from a large number of sources, which doesn’t just provide you with funds, but a validation of your product as well. Take a look at Play-i, who invented robots for teaching kids how to code. When initiating their crowdfunding campaign, they set a goal of $250k, which they reached within four days. At the end of their one-month campaign, they raised $1.4 million and got 11.000 pre-orders from people living in 80 different countries. Before the crowdfunding campaign, they simply had a prototype, and the funds they raised allowed them to put the prototype into production. Now that’s what we call validation. 

Crowdfunding doesn’t only apply for startups but is also used to raise money for social projects in local communities, for private projects such as publishing books or paying for medical bills, and for support of sports activities - just to name a few! When it comes to crowdfunding, there are three players: The project managers (the startups searching for funds), the contributors (the ones providing funds), and the platforms facilitating the connection between the two. 

There are a few different crowdfunding options for a startup: Reward, donations, and equity funds. 

Donation Crowdfunding 

Crowdfunding by receiving donations is free funding, which is music to most entrepreneurs’ ears. However, the downside is that startups rarely are able to raise a significant amount of money by donations. If you are a local startup or a startup with a social or environmental impact, it might still be worth a shot, as people tend to support local or impactful causes.

Reward Crowdfunding 

Reward crowdfunding is a better option for most startups, as you will be pre-selling your product or rewarding your contributors with a token of appreciation. This could be as simple as a beautifully designed t-shirt with your logo on it. Most crowdfunding platforms allow you to upload several products so that contributors can choose the one they want. That’s a great way to do it if you’re going to reach as many people as possible, as you can offer a product for each gender, age, skin type, or whatever is relevant in regards to your customer segments.

Equity Crowdfunding 

Equity crowdfunding is a way of funding your startup through multiple investors, each providing a bite of the cake. Because your investors, in return for funding, are provided with shares, it’s a part of the capital market, which means that it’s often subjected to financial regulations depending on in which country your startup is founded and the nationality of the crowdfunding platform. Since the process of selling equity is much more complicated than accepting a donation, you should make sure to think it well-through and preferably seek guidance from a lawyer. The platforms moderating equity crowdfunding are, however well trained, and will guide you through the process. 

How to Get Started with Crowdfunding? 

First things first. Before we get to the "how”, there are a few things to be aware of when choosing a crowdfunding platform:

All-or-nothing vs. Flexible funding

Some platforms run with an all-or-nothing policy, which means that you only get your funds if you reach your full funding target. However, on many sites, you will find an option for flexible funding, where you get your funds no matter if you hit your desired target or not.

Ability to over-fund

Some platforms allow you to over-fund. That means that your campaign will continue running for the scheduled timespan even if you’ve reached your target. It results in you getting more funding than you need. Sounds nice, right?

Pre-approval

Many platforms pre-approve the campaigns before putting them online. Of course, that makes it harder to get a campaign going, but in many ways, it’s a positive thing, as the quality of the projects on the site will be higher. However, you should make sure to read carefully about the application process, as you will need to provide the platform with a lot of information. 

Prices

Most crowdfunding platforms take a percentage of your funds. It can be anything from 3-15%, depending on the solution you choose. Besides their cut, there’ll be a transaction fee of a few percentages. Other platforms take a fixed fee, and a few are free (apart from the transaction fee). Make sure to include those expenses in your funding goal!

When you’ve chosen the right platform for your startup, there’s nothing left to do but start creating your campaign. As you now know, you’ll need to get pre-approved at some platforms. It mainly applies to equity crowdfunding. However, on many sites, you simply register and create your funding campaign with a few simple steps: 

  • Set a goal
    Before you get started, you need to set a goal and a duration for your campaign. As we said above, some platforms have a policy stating that you can’t get your funds if you don’t achieve your goals, so don’t overdo it. When that’s said, you shouldn't under-do it either - when people invest in a project, they expect to see it through. There's no need to get funds if they are not enough to get you going. 
  • Stand out! 
    Most crowdfunding platforms have thousands of projects, so for your startup to stand out, you need to make one hell of a presentation. Basically, it’s your pitch, but with even more visuals. And remember who your crowd is; unless you're going for equity funding, it’s regular people you need to convince, so use some ‘pathos,’ and speak to the heart.
  • Promote yourself!
    While the crowdfunding platforms promote the projects on their site, their focus will be spread across the width. The more you promote your campaign, the more likely you are to succeed. Spread the word!
  • Collect your funds
    The campaign is over, and you’ve hopefully reached your target. All that’s left to do is to collect your funds and get started.

Before you're ready to embark on your crowdfunding venture, you need to choose your campaign platform. We’ve collected a list of all of the best crowdfunding platforms in 2021 and divided them into groups. Trust us; the one for your startup will be on it!

Crowdfunding by donations & pre-sale

IndieGoGo

An all-time favourite is Indie GoGo, one of the largest crowdfunding sites. On IndieGoGo, you will find the most projects seeking funding are from the tech industry, creative projects, or community-based projects. What’s even more interesting is that it offers two options of funding - fixed and flexible. Whereas fixed makes sense, if you require a certain amount of money to complete your project, the other option is great for startups who can use any amount of funding.

Mightycause

If you are starting a non-profit organization, this might be the platform! MightyCause is specialized in good causes and is subscription-based, which makes it perfect for organizations with ongoing activities. Furthermore, it provides you with software to help you manage your donors, do marketing and integrate your campaigns to your website.

GoFundMe

For startups in the field of medicine, non-profit, education, or animal welfare, GoFundMe could be the place to get funded. It’s mostly used by private persons but is also startup-friendly. It’s a cheap crowdfunding platform and has led quite a few impressive funding campaigns for charitable causes. However, the competition on GoFundMe is particularly big, which means that your pitch has to be stronger than ever to succeed.

Kickstarter

As one of the biggest sites in the crowdfunding community, Kickstarter is a great place to seek funding. It has especially shown to be successful for creative startups and tech. In just ten years, the site has been the medium for raising more than 5 billion dollars. That’s quite a performance. Kickstarter is known to be user friendly for both project owners and contributors. One thing you should know is that Kickstarter is an All-or-Nothing crowdfunder, which means that if you don’t hit your funding-targets, you won’t get your funds.

Crowdfunder

The UK-based Crowdfunder is another big crowdfund platform on the market. They have a wide variety of businesses, and it’s a great place for startups. When a startup is searching for funds, the use of the platform is free. The same goes for charities. All in all, Crowdfunding is a platform that puts its heart in it. In total, they’ve raised more than 100 million Pounds.

Ulule

The crowdfunder Ululu is an excellent option for manufacturers as they offer two different fundraising types. The traditional one, making a financial target, and a rewards option. Now, the rewards option allows you to set your fundraising goals as a number of pre-sales or rewards. That results in a site where you will find many organic products, cosmetics, and books. Ulele is an all-or-nothing crowdfunding platform, but unlike many of its competitors, it’s offering a lot of support to campaigners. 

Go Get Funding

Another broad crowdfunder is GoGetFunding who raises money for everything from veterinarian bills to startups. While the site could use a makeover, it’s quite user-friendly, and even the most technically challenged founders can have campaigns up and running in no time. Go Get Funding is very well recognized throughout the world and is not too expensive for a startup.

Crowd Supply

If your startup is a hardware-superstar, this might be the place to seek your funding! Crowd Supply only launches campaigns for the creation of hardware. It’s a rewards model where you can upload your products and the financial goal you need to reach. That way, you don’t have to put your savings into a product you won’t sell, but instead, you’ll earn your funding while selling it. 


Equity Crowdfunding

SVX

For startups with social or environmental benefits, this crowdfunder could be the one. They are focused on impactful startups, and by that, we mean startups that make a genuine difference in the world. When applying for a fundraiser at SVX, they help you through every step. And all for a fixed price instead of taking percentages of your funds.

SeedInvest

Another platform on the market is the equity crowdfunding platform SeedInvest. The platform enables you to get funded by a crowd of investors as opposed to private persons. As the largest equity crowdfunding in the US, they’ve got a network of 450.000 investors who might be interested in buying in on your startup. As most equity crowd funders, SeedInvest is quite expensive but has a high success rate for its campaigns.

StartEngine

A crowdfunding platform that is optimized for significant funds is StartEngine. With a community of more than 300.000 investors, they have raised more than 250 million$ and are known to be easy to use. If you are reaching for the big bucks, this might be the platform for you.

Equitise

A different kind of crowdfunder is Equitise, an Australian based company with quite a few investors on board. Instead of having your project funded by the people, you can have it funded by VC and Angel Investors funding with a small amount each in return for shares. However, it also allows you to create a valuable network, as it is not irregular for a startup in Equitise to be funded by 300 different investors.

Startup Xplore

Another big equity crowdfunding platform is Startup Xplore, who prides themselves in dedication to their funding projects. In fact, Startup Xplore invests some of its capital in all the startups that succeed in closing a seed round and reaching their target. They offer a great deal of help to set up the raise and dealing with the cap table, and last but not least; They have an impressive success rate of 96%.

Crowdcube

Being entirely focused on small businesses and entrepreneurs makes Crowdcube an obvious choice. When creating your fundraiser, you’re able to choose which amount of money you need: Seed, Early-stage, or Growth-stage. When using Crowdcube, the minimal amount of funds you can raise is 50.000 pounds, and you will need to apply to raise with them, as they pre-approve all raises.

Fundable

Here’s a business-oriented one! Fundable is specialized in funding for businesses and have been able to raise more than 615 million dollars. That’s quite a bit! On fundable, you can either make an equity campaign and a rewards campaign. What makes it even more remarkable is that it’s a subscription-based crowdfunder, which means you pay a subscription fee for using the platform instead of paying a percentage of your funds.

Wefunder

On Wefunder, you can raise between $20.000 and $5 million by equity crowdfunding. The platform is simple, easy to use, and can have your campaign up and running in no time. Furthermore, they are one of the biggest crowdfunding platforms of the equity-type with a community of more than 870.000 investors.

OurCrowd

On Our Crowd, your startup will receive venture funds from OurCrowd’s immense network of ventures and investors. Furthermore, they invest a part of their capital in each prospect. Besides the funding, your startup will get quite a lot of excessive help and expertise throughout your growth. As you might have guessed, not everyone is eligible to be a part of OurCrowd. Their application process is quite extensive.

One Planet Crowd

The European crowd-lender platform OnePlanetCrowd is one that offers quite a few possibilities. You can either run an equity crowdfunding campaign or one offering convertible loans. One Planet Crowd is specialized in startups with health, social or environmental impact and is very careful when choosing their projects. In fact, they only accept around 25% of their financing requests, so have your business plan ready!

Crowdlending

Another new and exciting option of funding your startup is to do crowdlending. You’re probably smart enough to have figured out that while crowdfunding provides funding from multiple sources, crowdlending provides loans from multiple sources. Instead of providing investors with equity, you pay back the loan with interest. 

Kiva

Now, Kiva is unique! Kiva is a crowdlending platform allowing entrepreneurs to ask for loans from the crowd. Multiple types of small businesses are using it. In Fact, you’ll find startups working within everything from car rental, local restaurants, agricultural development, and design. On Kiva, you can get a loan of up to 15.000$ at an interest rate of 0%. Sounds too good to be true, right? It’s not. However, Kiva is for US-based entrepreneurs only