All for Joomla All for Webmasters
BUSINESS

9 crowdfunding sites for your business

business (2)

For entrepreneurs and startups with big business plans, taking the next step to raise capital can require a serious leap of faith. How will the project be funded? Who can help weed out the strong ideas from the weak ones? What will potential customers think of the product itself? Crowdfunding sites are a great way to answer all those questions and more, and there are more than 1,500 crowdfunding companies to choose from in the U.S. alone. Find out what crowdfunding sites are, the four main types of crowdfunding, and some of the top crowdfunding sites for business owners and entrepreneurs. 

What Are Crowdfunding Sites?

Crowdfunding sites are websites that allow investors to select from hundreds of startups and business ventures and invest as little as $10 on the growth of the one(s) they choose. These platforms generate revenue by taking a percentage of the funds raised through the site. The U.S. is the largest source of global crowdfunding, with transaction values reaching $537 million in 2021 and some of the top crowdsourcing sites on the internet. 

What Are the Different Types of Crowdfunding?

There are four main types of crowdfunding:

  1. Donation-Based Crowdfunding: People give money to a person, company, or campaign without receiving anything in return. For example, if someone needs an expensive piece of equipment for their new startup, they might ask for donations to help them make that purchase.
  2. Peer-to-Peer Lending or Debt-Based Crowdfunding: Backers pledge money as a loan to help a company or campaign get off the ground. The loan accrues interest and has to be repaid within a set period of time. 
  3. Reward-Based Crowdfunding: Donors receive something in return for their donations. That can range from a discounted product or service to a branded perk like a t-shirt, coffee mug, etc.  
  4. Equity-Based Crowdfunding: Startups or small businesses give away equity or shares of their company in exchange for investment funding from backers. Usually, the more the backers give, the more shares they receive. 

What Are the Benefits to Using Crowdfunding?

A few of the advantages of using crowdfunding for a startup business include:

  • Access to non-traditional funding. Entrepreneurs and small business owners can qualify for funds outside the standard sources and avoid the rigid requirements that accompany them.
  • A more efficient way to raise funds. Especially with some of the more popular crowdfunding platforms, it can be easy to tell your startup’s story, feature compelling media and messaging, offer incentives and rewards and have a one-stop-shop for potential backers to find you. 
  • A built-in brain trust. Customers (and backers) are only ever a click or two away. This gives you the chance to call on them for feedback and ideas and field their questions, concerns, and complaints. This continuous communication loop creates a built-in brain trust.
  • Added marketing and media exposure. The more popular the crowdfunding platform, the more eyes on your campaign, the higher the potential for press coverage and building brand awareness. This can be a great way to reach backers outside your existing network. 

What Are Sites for Crowdfunding?

Lantern by SoFi took a look at some of today’s most popular sites for crowdfunding, conducted thorough research on each, and evaluated them based on the varying needs of many different business types. In the end, we whittled our list down to these eight crowdfunding sites for businesses, all of which have the most flexible funding options: 

Kickstarter

Kickstarter is a creativity-focused crowdfunding site based out of Brooklyn, NY. It’s arguably the most popular crowdfunding site in existence. Kickstarter launched in 2009 and it has since helped people pledge $6.2 billion to the 210,099 projects that have been successfully funded on the platform.

 Kickstarter Pros

  • Massive marketplace with many users
  • High visibility, exposure, and familiarity as a platform
  • Transparent, all-or-nothing funding 
  • Exclusive service providers
  • Subscription-based model 

Kickstarter Cons 

  • A massive marketplace means massive competition
  • You can’t keep your funds if you don’t reach your crowdfunding goal 
  • Subpar customer service 
  • More creative-minded than business-minded 
  • Rules and restrictions on how to launch a product or project 

Indiegogo

Indiegogo is a San Francisco-based crowdfunding platform that was founded in 2007 with an emphasis on PRE-mainstream funding. Indiegogo lets people solicit funds for an idea, charity, or startup company, and backers can evaluate campaigns and support entrepreneurs and their innovations from the earliest stages of product development.

 Indiegogo Pros 

  • Campaign creators can continue to raise money after a successful fundraiser
  • The earliest backers get limited-time perks and pricing
  • Two types of funding options: all-or-nothing or keep-what-you-raise 
  • Diverse range of categories you can create campaigns for — from Tech & Innovation to Film, Theater, Comics, Charity, Personal Causes and more 

Indiegogo Cons 

  • Less visibility than bigger-name sites like Kickstarter 
  • Campaigners must personally ship out perks and rewards to backers who claim them 
  • A 5% fee per standard crowdfunding campaign plus payment processing fees of 3%+$0.20

Seedinvest

When it comes to funding for startups, Seedinvest is an equity-based crowdfunding platform that easily connects startups with investors online. Headquartered in New York and founded in 2012, Seedinvest thoroughly vets its startup applications and only puts forth the ones (less than 2% of all applicants) that pass its self-proclaimed “comprehensive due-diligence process.” 

Pros of Seedinvest

  • Minimum investments for backers as low as $500
  • Accepts non-accredited investors 
  • Doesn’t involve any ongoing fees 
  • Its Auto-Invest feature helps investors easily build a diversified portfolio 

Cons of Seedinvest 

  • Charges a 2% processing fee (up to $300 max) per investment, although it’s returned if the company doesn’t reach its fundraising goal 
  • Investments are risky and highly illiquid 

Quirky

Quirky is another NYC-based crowdfunding site, but with a bit of a twist. It’s more of a service that connects a large community of inventors so they can collaborate, gather feedback and facilitate the production and sale of their inventions. Quirky then helps produce them and bring them to market. Even though it went bankrupt in 2015, Quirky came back with brand-new financing and owners and it’s moving forward fast. 

Quirky Pros

  • Free to use
  • Entrepreneurs have the idea, Quirky creates the product 
  • Easy idea-submission form and process 
  • Great platform for inventors and “fixers” who see everyday challenges and offer solutions 

Quirky Cons

  • The process for inventors getting paid is overly involved
  • If an inventor’s idea is rejected, there isn’t always an opportunity to refine it 
  • Quirky retains the rights to the inventor’s intellectual property
  • It can alter royalty payment amounts “for any reason” 

Fundable

Fundable is a SaaS crowdfunding platform with a focus on small business funding. Headquartered in Powell, Ohio. Fundable generated over $80 million in funding commitments from investors, customers, and friends in its first year alone. Fundable’s main claim to fame is offering hands-on support to startups and small businesses as they navigate the fundraising process.

Fundable Pros

  • Created by startup founders who can relate on a personal level
  • A hands-on approach from staff during every step of the process 
  • Offers both reward-based and equity-based crowdfunding 
  • Minimal fees for successful campaigns
  • Campaigns are prescreened, which benefits backers 

Fundable Cons

  • Entrepreneurs don’t get funds if they don’t reach their funding goal 
  • Flat monthly fees can get costly for unsuccessful campaigners 
  • Campaigns are prescreened before they get approval, which hurts pitching companies 

CircleUp

CircleUp is an equity-based crowdfunding platform based out of San Francisco, CA. It was created with social enterprises and B Corporations in mind. CircleUp uses a proprietary, data-centric technology called Helio to predict breakout companies and shine a light on untapped potential, and it caters mainly to early-stage consumer brands with physical retail products. Think: SmartyPants vitamins. 

CircleUp Pros

  • An emphasis on diversity, inclusion, and holding people accountable 
  • A quality marketplace with access to over 800 investors, 50% of which are institutions 
  • A separate $125 million Growth Partners Fund, which uses its Helio software to identify startups that deserve investment 

CircleUp Cons

  • Fee structure is vague, and it varies
  • Investors must be accredited 
  • Only 7% of startups are approved to raise money on its website
  • Campaigns have fundraising minimums and maximums 

LendingClub

LendingClub is a peer-to-peer lending-based loan crowdfunding site that’s headquartered in San Francisco, CA. LendingClub borrowers apply for loans within its network of lenders to back up to $40,000 in investments. The company thinks accessing money should be seamless and offers everything from personal loans to business loans, education loans, and more. 

LendingClub Pros

  • The minimum credit score to apply for a loan is 600 — a pro for subprime borrowers 
  • No hard credit inquiry is required to check loan rates on the site, which means less credit score damage while you’re shopping around for a loan 
  • Borrowers can stretch the loan repayment terms to three years or even five years 

LendingClub Cons

  • There’s a medley of fees for borrowers, like a $7 fee if you pay by check, a $15 low balance fee, and a 5% late fee
  • It can take up to seven days for LendingClub to actually turn the money around and get it into the borrower’s account 
  • LendingClub charges an origination fee, which is a payment associated with the establishment of an account with them. 

Patreon

If you’re searching for crowdfunding for a small business or a platform that lets you raise money for your artistic endeavors, Patreon might be a solid fit for you. Patreon helps artists give their fans exclusive access to their content and insight into their creative process. In doing so, artists can create a recurring revenue stream, feature work their audience loves and build a connection with their fanbase. 

Patreon Pros

  • Helps creators crowdfund continuously 
  • Offers rewards-based crowdfunding opportunities and multiple subscription plans 
  • Keeps it light on the restrictions in comparison to other crowdfunders 

Patreon Cons 

  • There can be snags in collecting funds for creators 
  • There aren’t any built-in promotional tools
  • Many people have complained publicly about the platform 

Alternatives to Crowdfunding for Your Business

For some startups, aspirers, and creators, crowdfunding seems like an ideal platform to raise seed funds. Still, there are other options for those who want to take a more traditional approach. Here are a couple of alternatives to crowdfunding for your business: 

Small Business Grants – Grants for small businesses are a great way to gather funds for a product or project. Grants are lump sums that are awarded to a business or business owner by federal, state, or local governments or even private corporations. Unlike loans, grants don’t have to be repaid, although they may have stipulations about how the money can be spent. If you visit Grants.gov, you can find a list of small business grants and search them based on a variety of criteria. 

Small Business Loans – Small business loans offer a variety of options to entrepreneurs and startups that need to borrow funds to grow their company. They often come in the form of an SBA loan, which is partially-guaranteed by the U.S. Small Business Administration (SBA) and issued by participating lenders. They can also come in the form of a personal loan, term loan, line of credit, cash advance, or even as equipment or startup financing. If you’re trying to put your best foot forward by getting small business funding for your startup or even invention or idea, a small business loan can help you get on the right track. 

The Takeaway

Crowdfunding sites are websites that allow investors to select from hundreds of startups and business ventures and invest as little as $10 on their growth. There are four different types of crowdfunding: donation-based, debt-based, reward-based and equity-based. For a business or entrepreneur, the benefits of crowdfunding include access to non-traditional funding sources, a more efficient way to raise funds, having a built-in braintrust to refine a project or business plan, and extra marketing/media exposure. 

Learn more:

Lantern by SoFi:

This Lantern website is owned by SoFi Lending Corp., a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license number 6054612; NMLS number 1121636. (www.nmlsconsumeraccess.org)

All rates, fees, and terms are presented without guarantee and are subject to change pursuant to each provider’s discretion. There is no guarantee you will be approved or qualify for the advertised rates, fees, or terms presented. The actual terms you may receive depends on the things like benefits requested, your credit score, usage, history and other factors.

*Check your rate: To check the rates and terms you qualify for, Lantern conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender(s) you choose will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

All loan terms, including interest rate, and Annual Percentage Rate (APR), and monthly payments shown on this website are from lenders and are estimates based upon the limited information you provided and are for information purposes only. Estimated APR includes all applicable fees as required under the Truth in Lending Act. The actual loan terms you receive, including APR, will depend on the lender you select, their underwriting criteria, and your personal financial factors. The loan terms and rates presented are provided by the lenders and not by SoFi Lending Corp. or Lantern. Please review each lender’s Terms and Conditions for additional details.

Personal Loan:

SoFi Lending Corp. (“SoFi”) operates this Personal Loan product in cooperation with Even Financial Corp. (“Even”). If you submit a loan inquiry, SoFi will deliver your information to Even, and Even will deliver to its network of lenders/partners to review to determine if you are eligible for pre-qualified or pre-approved offers. The lenders/partners receiving your information will also obtain your credit information from a credit reporting agency. If you meet one or more lender’s and/or partner’s conditions for eligibility, pre-qualified and pre-approved offers from one or more lenders/partners will be presented to you here on the Lantern website. More information about Even, the process, and its lenders/partners is described on the loan inquiry form you will reach by visiting our Personal Loans page as well as our Student Loan Refinance page. Click to learn more about Even’s Licenses and Disclosures, Terms of Service, and Privacy Policy.

Student Loan Refinance:

SoFi Lending Corp. (“SoFi”) operates this Student Loan Refinance product in cooperation with Even Financial Corp. (“Even”). If you submit a loan inquiry, SoFi will deliver your information to Even, and Even will deliver to its network of lenders/partners to review to determine if you are eligible for pre-qualified or pre-approved offers. The lender’s receiving your information will also obtain your credit information from a credit reporting agency. If you meet one or more lender’s and/or partner’s conditions for eligibility, pre-qualified and pre-approved offers from one or more lenders/partners will be presented to you here on the Lantern website. More information about Even, the process, and its lenders/partners is described on the loan inquiry form you will reach by visiting our Personal Loans page as well as our Student Loan Refinance page. Click to learn more about Even’s Licenses and Disclosures, Terms of Service, and Privacy Policy.

Student loan refinance loans offered through Lantern are private loans and do not have the debt forgiveness or repayment options that the federal loan program offers, or that may become available, including Income Based Repayment or Income Contingent Repayment or Pay as you Earn (PAYE).

Notice: Recent legislative changes have suspended all federal student loan payments and waived interest charges on federally held loans until 01/31/22. Please carefully consider these changes before refinancing federally held loans, as in doing so you will no longer qualify for these changes or other future benefits applicable to federally held loans.

Auto Loan Refinance:

Automobile refinancing loan information presented on this Lantern website is from Caribou. Auto loan refinance information presented on this Lantern site is indicative and subject to you fulfilling the lender’s requirements, including: you must meet the lender’s credit standards, the loan amount must be at least $10,000, and the vehicle is no more than 10 years old with odometer reading of no more than 125,000 miles. Loan rates and terms as presented on this Lantern site are subject to change when you reach the lender and may depend on your creditworthiness. Additional terms and conditions may apply and all terms may vary by your state of residence.

Secured Lending Disclosure:

Terms, conditions, state restrictions, and minimum loan amounts apply. Before you apply for a secured loan, we encourage you to carefully consider whether this loan type is the right choice for you. If you can’t make your payments on a secured personal loan, you could end up losing the assets you provided for collateral. Not all applicants will qualify for larger loan amounts or most favorable loan terms. Loan approval and actual loan terms depend on the ability to meet underwriting requirements (including, but not limited to, a responsible credit history, sufficient income after monthly expenses, and availability of collateral) that will vary by lender.

Life Insurance:

Information about insurance is provided on Lantern by SoFi Life Insurance Agency, LLC.

Source :
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular

To Top