Top Crowdfunding Platforms to Help Generate Funding for Startups

J. Frank Sigerson  |

For entrepreneurs and their startups, seed funding plays a major role in building on the stability of a business’s foundation. While there are many sources of seed capital, going out and pursuing it isn’t the easiest of processes.

For that reason, many have turned to crowdfunding, which has helped countless projects and ideas gain traction and hit the ground running. Crowdfunding has been used to effectively reach out to a large investor base, to fuel the growth and production of successful ventures in different sectors.

Rewards-based crowdfunding features discounts and early access to physical products and services, such as those found on Kickstarter and Indiegogo. Equity-based crowdfunding allows people to become investors in the form of ownership through equity, which is given in return for investment.

Research by The Crowdfunding Center showed that in 2016, there were 350 new projects every day, with 68 being fully funded on a daily basis. Out of 132,000 campaigns, 18.78% were fully funded, with the average project managing to raise $31,119, based on an average pledge of $94.

Tech was the most popular category, with 1,999 projects, raising a total amount of $117,402.

The United States managed to raise the most amount of money geographically, with $549,620,638, and successfully funded 15,515 projects.

Crowdfunding has its merits for seed and early stage financing, raising revenue in a matter of weeks, while also serving as an effective marketing campaign to drive traffic and increase awareness. They also tend to generate buzz through word of mouth by committed investors.

Since the passing of the JOBS Act allowed startups to generate capital through multiple public investors, crowdfunding has risen monumentally, resulting in the creation of several different platforms, all which generate interest and capital for aspiring entrepreneurs.

Different choices for ventures

The word crowdfunding has become synonymous with one of the most well-known and established names in the industry, Kickstarter. Founded in 2009, Kickstarter has managed to secure $3.9 million in pledges, and has even financed films that have gone on to win Oscars.

Kickstarter managed to fund 149,460 project and features 15,120,771 total backers, who help breathe life into various projects and ambitious ventures ranging from art, film, tech, and games.

Since 2013, WeFunder has seen over $66 million in investments, spread across 21 startups. The platform differs from other crowdfunding methods of purchasing products or contributing to a project. WeFunder serves as an investment crowdfunding portal, where anyone can get involved in the startup of their choice, for as little as $100. Successful ventures can gain exposure in the market, with investors being able to benefit financially and taking pride in helping launch a future business that could change the world.

Indiegogo is another pioneer in the crowdfunding industry, providing backers with the opportunity to get involved with the latest gadgets, tech, and other products designed to add an element of comfort or entertainment into people’s lives. They have managed to raise over $1 billion throughout all of their featured projects, and also maintain a live marketplace where tech products can be sold directly to consumers.

Crowdsupply helps promote innovative hardware to a wide market and has successfully funded 70% of projects launched on its platform, with projects raising an average amount of $66,000. While it focuses on hardware and electronics, Crowdsupply also features various projects in books, education, and others areas as well.

Crowdfunder features a community of 200,000 investors and entrepreneurs, providing equity crowdfunding campaigns where startup founders can raise capital in exchange for equity. They feature an extensive network of 12,000 VCs and angel investors, allowing for wide access to a variety of funding from pre-seed to Series A. Crowdfunder has raised over $150 million for startups, providing analytics and ad campaigns to increase effectiveness of marketing for ventures.

SeedInvest is another equity crowdfunding platform that allows investors to become shareholders in highly vetted startups, with the company only accepting around 1% of applicants. With a minimum investment of $500, this allows for an investor to spread the wealth and minimize risk. With 236,417 total investors and over $100 million total investments, SeedInvest has helped fund over 150 successful startups.

Startsomegood promotes cause-driven projects such as animal rights, disaster relief, human rights, and others, having raised over $9 million for over 900 projects, aimed at tackling social problems and enhancing the quality of life. They promote social innovation, with founders Tom Dawkins and Alex Budak, being inspired by Kickstarter’s business model to fund ideas, adapting it to target social entrepreneurs that would invest in social deficiencies.

XPO2 is another cause-driven social enterprise, which uses rewards-based crowdfunding for various initiatives in impoverished countries, suffering from lack of social services such as health care and education. They work with local nonprofit organizations who aim to improve the quality of life, as well as environmental restoration and animal conservation efforts. By focusing on small and medium sized organizations, their high vetting standards ensures that only quality enterprises are supported with financial and marketing tools.

Digital Asset Monetary Network, Inc.(OTCMKTS:DATI) fuels crowdfunding efforts through equity crowdfunding platform truCrowd, Inc., having helped fund WorkDone’s successful onboarding onto the platform. By providing an innovative Public Accelerator Incubator (PAI), this process affords startups with increased investment opportunities through a wide portfolio, as well as allowing investors to see early liquidity within 2 years.

Fundable provides both rewards-based and equity-based crowdfunding opportunities, having raised over $444 million for aspiring startups. Their rewards-based campaigns are ideal for companies looking to raise up to $50,000, while equity-based can accommodate those with larger goals of up to $10 million. Established by startup founders, Fundable shares their experiences to help perspective entrepreneurs launch an effective crowdfunding campaign for success.

With so many options in the crowdfunding sector, entrepreneurs continue to turn to crowdfunding as a source of funding during a startup’s developmental stage. Crowdfunding remains an effective way to market a new campaign to a wide range of investors, helping increase the chances of a new venture succeeding.

DISCLOSURE: I don't have any financial interests or connection with any of the companies mentioned in this article.


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