Top Crowdfunding Platforms: Pros and Cons
The internet gave us a way to reach out to people and get investments. This process has found its own niche, and it is called crowdfunding.
The problem is that there are so many crowdfunding platforms now. What once started as a way for people to help each other has become a business. Crowdfunding platforms earn money from the investments you get. As a result of this, they also popped out like mushrooms, and it is a tad difficult to choose the right one. Today, let us take a look at the top crowdfunding platforms and their pros and cons.
1. Kickstarter
This is by far the most popular crowdfunding platform among all of them. The company’s focus is to fund projects like a book or a new music album. They also support innovative products like solar chargers and single-wheel vehicles.
Pros:
- You can get your cash fast once you meet the goal
- You still get to keep control of your business
- You get to have a following for your product even before you release it
Cons:
- Not for businesses looking for capital
- You cannot use it for non-profit ventures
Take note that at Kickstarter, you cannot keep your money or withdraw it unless you reach your goal. The beauty of Kickstarter is that it supports many categories like arts, music, film, food, games, and others.
Kickstarter has policies about the businesses they support. They do not support illegal or shady projects. If you want to build an online casino like Vulkan Vegas casino, you’ll have to do it on your own.
2. Indiegogo
The second most popular crowdfunding platform is something you can use for non-profit purposes. Like the first one, Indiegogo is also great for funding projects.
Pros:
- You do not have to meet your target fund to withdraw the money
- You can do charity here
- You can create social media integrations
Cons:
- Not as popular as Kickstarter
- You may need a business license before you can ask for funds
- You have to fulfill your commitment even if your target budget is not met
- Has a high fee of 9%
Indiegogo also has a feature where you can buy funded products. What this means is that if a creator gets funded for an innovative product and it becomes available, you can buy this product from the site.
If you think about it, this platform is a powerful option. Since 2008, the platform has given life to more than 800,000 ideas. The platform has a massive following – there are at least 19,000 new projects here every month.
3. Patreon
You may have already heard about this because many YouTubers and content creators use this site to fund their projects. Patreon, however, is not a one-time donation site. Instead, it is a subscription-based crowdfunding platform.
Think of Patreon as a business website. It is still technically a crowdfunding platform, but you need to deliver on your promise every month. Basically, the crowd or your subscribers are the ones funding your content because they love it.
Pros:
- You are in control of the money you charge
- You have a consistent stream of income for what you produce
- Has three tiers for fees between 5% and 12%
Cons:
- You have to consistently provide content
- Subscribers can unsubscribe if they want to
- Charges credit card processing fee
With Patreon, you can ask your followers to subscribe for a monthly fee for your content. They do not make bulk payments. The support you get can be as little as $1 per month.
If you are a content creator, as a tutor or singer, Patreon is the ultimate choice. YouTubers are the ones that really benefit from this. They offer free tutorials on the YouTube platform, but they also offer what they call exclusive content. However, people can only access this exclusive content if they subscribe.
What makes Patreon different is that it is not leaning towards the creation of a one-time product. Rather, it is a method of supporting an ongoing process. For example, a subscriber can support a comic book creator. For as long as the artist is producing content, there is a reason for the subscribers to donate money.
4. GoFundMe
This is the kind of crowdfunding platform that you need if you just want to raise money for pretty much whatever reason. If you need $50 for something, like a computer game, then you can use this platform.
Pros:
- It has a money-back guarantee for the donors
- You have access to many fundraising tools
- There are no limits or deadlines to your campaign
- No fees or commissions
- No goals required
Cons:
- Not all countries are supported
- The success rate is low for funding
- You need to meet withdrawal requirements
- You need to build a community before you get donations or you will be ignored
GoFundMe is the go-to platform for those who need money for emergencies. If someone in your family is sick and you need money for medication, you can ask supporters to donate.
The platform is popular, and it has a lot of users. Many celebrities and influencers use this to raise money for charitable purposes.
Summary
Choose a crowdfunding platform that charges a small fee. As an entrepreneur, your goal is to raise money, not to lose it. Read about the experiences of the people who used the crowdfunding platform that you are eyeing. See to it that there are a lot of users—a crowdfunding platform that has no users is a dead one, and you will not get the funds that you need.
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