So, you’ve decided on your startup idea and your product, and you’re ready to earn your startup funding. You know you want to crowdfund your idea, so you’ve come here to figure out a place to start. I want to say, however, that it’s not going to be an easy decision to choose your platform, even if it seems it would be. Choosing your crowdfunding platform for your startup takes a lot of research. 

But here, I have compiled a comparison of the different platforms and how they are used, to hopefully make your decision easier. There are quite a few things to keep in mind when approaching where to get your startup funding, which you may not have previously considered. Here are some important things you will need to consider before choosing your startup platform.

Identify Your Niche and Startup Funding Opportunities.

The first thing to think about before approaching startup funding is who your target audience or demographic should be. This will not only affect how you market your product and your business but will also allow you to properly choose which platform to use. Crowdfunding platforms are not one size fits all, each caters to a different niche:

  • Kickstarter: while the largest and seemingly most universal platform, caters especially to creators. This can include filmmakers, artists, and musicians
  • Indiegogo: Fairly universal, catering to technology, creativity and innovation
  • Patreon: Popular with YouTubers, this platform caters especially to artists and creators
  • Crowdfunder: Good for raising money from investors, catered to entrepreneurs
  • iFundWomen: Focused on female-led businesses and projects
  • SeedInvest: Catered to entrepreneurs and professionals, this takes a proper screening and approval process to register 
  • Peerbackers: Focus on business and innovation
  • RocketHub: platform for artists, education, humanitarians, and business

Deciding on your platform will depend on the audience you want to reach. There are multiple platforms that cater to businesses and even different types of business. In order to avoid just choosing one and making the wrong choice, getting the most startup funding out of your platform will take actual marketing research. Look through keywords, find where your target audience lives. Then you will be able to pitch most effectively on the platform that will work best for you.

Type of Platforms for Startup Funding

Crowdfunding platforms are generally based around different ways to reward your investors. The main types of funding are:

  • Reward based: people who donate to your product expect a kind of award in return. 
  • Equity based: people who donate to your product will then have a share in the product when funded
  • Donation based: mainly for humanitarian efforts, this is purely a donation with no reward expected

Deciding the type of platform, you wish to use may depend on the product you are willing to sell. For startup fundingit is unlikely you will use a donation platform, but there may be a case, say for a business that intends to give back to a charitable cause, where this funding may be appropriate. Reward based funding requires you to create a reward, and for some companies, equity based might be the most helpful. Each platform uses different approaches:

  • Reward Based: Kickstarter, Indiegogo, Crowdfunding Bum
  • Equity Based: Crowdfunder, SeedInvest, CircleUp, Republic
  • Donation Based: GoFundMe, Fundly

Deciding the type of platform to use for your startup is not, then, just about what you’re trying to sell or do with your business. It’s about choosing how you want to reward your backers when they give you money. The best thing about crowdfunding is that members of the public, anyone, can help wither startup funding, but these are not professional investors you can convince with your grace and charm. 

You will have to prove to them that you can deliver by giving them something in return. This is what choosing the type of system can help with You can decide how you want to engage with your backers so they will trust you, just as you trust them.

How Much You Pay

As much as we would all like to think otherwise, raising money from the public, using websites’ services, can’t be free. There will always be a fee, something you need to give to use the service. Every service has a different approach to fees, so you will want to figure out exactly which service will be most worth it for what your business.

  • Kickstarter: 5% funds raised
  • Indiegogo: 5% funds raised
  • Patreon: 5% funds raised
  • Crowdfunder: Based around subscription plans: free plan, $299 starter plan, and $499 premium plan
  • IFundWomen: 5% funds raised
  • Crowdfunding Bum: 5% platform fee (temporarily waived for 0% fees)
  • SeedInvest: 7.5% funds raised
  • Peerbackers: 5% successful campaign
  • Rockethub: 4% fully funded campaign, 8% partially funded campaign

However, the platform fee of a percentage of funds raised is usually not the only money you will have to put towards the platform. Transactions fees or the like are used by many of these platforms, and this is what will likely determine which platform would be the best to earn your startup funding.

  • Kickstarter: 3% + $0.20 per $10 pledge, 5% + $0.50 per under $10 pledge
  • Indiegogo: 3% + $0.30 per transaction + $25 transfer fee
  • Patreon: average 5% per transaction
  • iFundWomen: 2.9% + $0.30 per transaction
  • Crowdfunding Bum: 2.9% + $0.30 per transaction.
  • SeedInvest: 2% paid by investor
  • Peerbackers: 2.9% per transaction
  • RocketHub: 4% per transaction

With every platform utilizing a different type of fee and different ways to receive money or reward backers, fees are just another layer to the decision-making process. It may take more work on your end, but when raising startup funding, you want the best platform for your new business. 

Conclusion

Choosing a platform for startup funding is the first decision you will need to make, after the decision to crowdfund in the first place. Deciding on which platform to use is a layered one, each layer requiring more and more research, but each layer will also narrow your decision to the platform right for you. 

When starting a new business, it’s never going to be easy, but once you find the platform best for your niche, your rewards needs, and your payment abilities, the rest will follow right behind.

Final thoughts.

We hope you stick around a while to find out more about all that Crowdfunding Bum has to offer. You will find ample reasons to choose us as your funding source.

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