Crowdfunding Success Secrets
Popular Crowdfunding Sites
The first thing you’ll need to do is decide which site you want to use to generate funding. There are dozens of popular sites these days, and each has its own set of pros and cons you’ll need to weigh.
Let’s take a look at a few of the most popular and interesting crowdfunding sites that are currently available.
Kickstarter is perhaps the most popular crowdfunding website. It launched in 2009 and has since been used by thousands of people, to rise funding from millions of individual backers!
Here are some interesting facts about Kickstarter:
- Creators keep 100% control and ownership. They do not have to give up any ownership of their company, nor any share of their profits. All funds are donated by backers with no expectations of monetary gain.
- Kickstarter accepts pretty much any kind of creative project you can think of.
- Kickstarter charges a 5% success fee, but you’ll only have to pay if your project is fully funded. So keep this in mind and account for the fee when you set your funding goal.
CrowdCube, a UK-based crowdfunding solution, is different from your average crowdfunding system. Rather than offering donation-based funding, CrowdCube works more like traditional investment, where you must give up a percentage of your equity to backers.
Here are some facts about CrowdCube:
- You must give up a percentage of equity to investors.
- You must have a business plan and financial forecasts available in order to be “investment ready”.
- There are no listing fees or membership fees, but they do have a 5% success fee, plus a solicitor fee and admin fee, plus 0.5% of the total raised for payment processing.
CrowdCube is a good place to try if you’ve tried other funding methods and haven’t been able to reach your goal. Because you’re relinquishing some equity in your company, it may be easier to get funded.
IndieGoGo is very similar to KickStarter. It’s a bit more geared toward creative pursuits than other sites, but they still accept physical products as well as creative projects like movies and books.
Here are some facts about IndieGoGo:
- You keep 100% ownership of your company.
- Success fee is 4%, lower than some others. If you don’t meet your goal, the fee is 9%. They also charge a 3% processing fee for payments from credit card and PayPal.
Unlike other sites, you still get to keep any money you raise, even if you don’t meet your goal. However, if you opt for the Fixed Funding option, you must reach your goal in order to keep any money
RocketHub is a unique system, because it allows you to raise funds without worrying about whether or not you meet your goal or paying huge fees. They are a lot more friendly to smaller ventures.
Here are some facts about RocketHub:
- Free to launch a project.
- You keep all the funds you raise, even if you don’t meet your goal.
- Fastest payouts in the industry. They pay on the first Friday after your project ends. It takes approximately 5-10 business days in most cases.
- Lower fees than most other sites. 4% success fee if you reach your goal, or 8% if you don’t, plus 4% credit card processing fees.
- Potential to have A&R fund your project.