Crowdfunding has been around for a while and is becoming one of the most popular ways new business start their projects. However, not every crowdfunding platform works in the same way, so we have found the top 3 for you.
BUT FIRST, LET’S SEE HOW IT ALL STARTED
The first successful crowdfunding as such actually happened as far back as 1997 when a rock band named Marillion wanted to have a US tour they couldn’t afford. So, they started an internet campaign and raised 60 thousand dollars for their goal. They liked this new way of getting money so much that they funded their studio albums the same way.
However, what they did had a lot more effect on the world of business than anyone would expect. The attention crowdfunding got as a concept of funding projects launched the first platforms like Donors Choose, Global Giving, and Artist Share in 2000, 2002, and 2003 respectively.
This meant that by the year 2009, half of a billion dollars were raised to help growing businesses and small projects. Since then, the crowdfunding world has expanded rapidly. In the year 2015 alone, the Massolution report has estimated that the combined total of crowdfunding hit 34 billion dollars. (Still, to be honest, only 9 million were collected through platforms while 25 were instances of P2P lending).
The fact that raising capital for a new business has always been the hardest part of starting a company means that crowd funding was welcomed with open hands. In fact, it changed the world of business upside down. Instead of chasing for banks and other investors, an aspiring entrepreneur can now simply try to appeal directly to the potential customers and offer them rewards in exchange for their help with the campaign.
There are three different bases for crowd funding – donation, reward, and equity. Donation-based crowd funding is usually reserved for charities and other non-profit organizations; Reward system usually offers the product at a lower cost to the patrons; equity offers stock to accredited investors.
These are the top 3 platforms in the year 2017.
Kickstarter is probably the best-known crowdfunding platform today. In fact, its name is slowly starting to be used as a synonym for crowdfunding even if you are not actually using their platform. It has a well-developed community that raises over a million and a half dollars each day. In fact, one project (OUYA gaming platform) managed to generate as much as 2.6 million dollars in the first 24 hours after being set up. While Kickstarter keeps 5 cents for every dollar you raise, it also provides a lot of safety to those who pledge money to your project. Once you set your goal, you will need to reach it if you want to actually collect the money to invest in your startup business. However, Kickstarter is a business platform, only backing creative projects. So, if you want to make a film, or launch a new technology feel free to visit. But, if you want to raise money for a humanitarian project, you would be wiser to look elsewhere.
Indiegogo was actually the first platform that made it big in the world of crowdfunding. It was founded in the year 2007 and has since raised well over a billion dollars. And the traffic they generate is impressive as well, in fact, the largest ever campaign on this platform was for the Flow Hive a specialized beehive that was designed to make it possible to extract honey automatically without overly disturbing the bees. When Cedar and Stuart Anderson decided to launch their campaign they were hoping to raise about 70 thousand dollars to get the design off the ground. However, they raised well over 12 million dollars instead. Unlike Kickstarter, however, Indiegogo has no rules against charities and it offers a more “flexible” method of funding. You can keep the donations even if the goal that you set was not reached, but they will keep 9% of the donations instead of the regular 4%.
If you are not raising money for a business project but rather for a cause, or even to help yourself with a personal goal, this is the platform for you. The community on this website is very friendly and it likes helping those who need it. Whether the issue comes from medical bills, or simply the lack of funds needed to take your child on a school trip, share your story and GoFundMe community might help you achieve the goal.