10 Best Crowdfunding Sites in the USA in 2024
Are you all hyped up to run your company and sell goods or services that you have but lack resources for? Or is it just an idea by now? You need a fundraising strategy before you can get to the essential strategies for business development. It could be that crowdfunding is the solution that you are looking for.
The worth of US Crowdfunding Market was $1.41 billion in 2023. Needless to say, it plays a major role in enhancing the economy and assisting new entrepreneurs. So how can one use crowdfunding to their advantage? What are some of the online fundraising platforms available?
What is a Crowdfunding Platform?
Crowdfunding sounds exactly like what it states; ‘crowd,’ which refers to group of people, funds a project through pooling together. This strategy allows numerous individuals to make payments as part of more general campaign rather than making an organization ask much money from professional investors.
Thus, crowdfunding platforms enable groups of people to contribute their money easier. To support, they only need to enter a URL and use an online payment method.
How Do Crowdfunding Platforms Work?
Crowdfunding platforms work by acting as intermediaries between investors and fundraisers when it comes to payment transactions. Various deals such as variable percentage rates or lower fees are offered by crowdfunding platforms working with networks of partners and systems.
There is specific system used by the best crowdsourcing sites aimed at attracting everyday investors. For example, rewards-based crowdfunding platforms may offer perks like free swag, credits, or exclusive discounts for backers.
Top 10 Crowdfunding Platforms
We have compiled below a list of top crowd funding websites based on type (how incentives are provided), focus area as well as pros and cons related with them:
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Kickstarter
Type: Rewards
Explanation: Kickstarter has grown to become one of the largest reward-based crowdfunding platforms in existence at 15 years old with almost $8 billion raised via over a quarter million projects on its platform alone as it claims.
Target: Creative works and start-ups
Pros: One of the best-known platforms; funders can choose from various kinds of “tiers” ; don’t have to pay if you fail.
Cons: Very much inclined towards creative projects; less than $1,000 raised by 32,000 projects.
Fees: A platform fee of 5% if you hit your target; payment transaction fees range from 3% to 5% (for US).
2. Indiegogo
Type: Rewards
Description: Indiegogo focuses on tech entrepreneurs who are “early adopters”. Since launching in 2008, it has given life to more than eight hundred thousand ideas.
Focus area: New approaches for daily problems.
Pros: Its projects range from idea stage to any other phase; it’s been around for over fifteen years facilitating launches for many schemes; women run about forty seven percent that surpass their goals.
Cons: Gear and solutions rather than artistic projects are prioritized here.
Fees involved include most countries where a nominal flat rate plus a transaction fee at between three to four per cent except United States..
3. GoFundMe
Type: Donations
Description: “Your Home for Help” is the message that GoFundMe bears. The main areas include medical, emergencies, non-profit causes such as education and relief during crises, and memorials.
Focus Area: Families affected by natural calamities and diseases mostly those resulting into vulnerability.
Pros: Focused on philantropy hence creating a world full of love and kindnes .
Cons: No rewards–GoFundMe explicitly prohibits organizers (people raising the money) from providing anything in exchange such as goods or services to those contributing.
Fees: GoFundMe charges a fee of 2.9% plus $0.30 per transaction made.
4. Patreon
Type: Reward-based
Description: Patreon’s primary aim is to assist artists in growing their fan bases and launching their professional careers. There is also a social media aspect of Patreon, which allows fundraisers to interact with supporters through posts and direct messages.
Focus: Small groups and individual creatives, especially content creators like performers, writers, podcasters, and game designers.
Pros: Foster connections as well as resources; beautiful looking; fans get real goodies like exclusive content for subscriptions.
Cons: Most of the funds made on the platform go away to Patreon.
Fees:
Pro plan: 8%, plus applicable fees ranging from 2.9-3.9% of most transactions.
Premium plan: 12%, plus applicable fees ranging from 2.9-3.9% of most transactions.
5. Crowdfund
Type: Reward-based
Description: Known as “The more powerful, flexible and free” Crowdfunding site is how they describe themselves in comparison to others. The Crowdfundr is focussed on creators and independent businesses.
Since then it has served more than 200,000 campaigns raising over $250 Million since 2012
Focus: Budding creators and entrepreneurs that may not have lots of funds.
Pros: A lot of freedom for fundraisers to decide how the platform gets paid.
Cons: Not as popular as other platforms?
Fees:
Optional Tips (Supporters can tip the platform so organisers don’t pay fees)
Fee Recovery (organizers ask supporters to pay back the 5% platform fee + payment processing fees) otherwise artist covers costs instead
Flat Rate (organizers pay all fees while supporters are charged nothing)
6. Mightycause
Type: Donation-based
Description: Mightycause derives its name from its intention – promoting social causes. Mightycause mainly targets non-profits but also serves teams or individuals who want to make a difference.
Key Features: Has donor management tools and real-time donation reports, also runs community-led “Giving Days” together with organizations.
Pros: Personalized donation campaign led by an experienced team.
Cons: A smaller company that may not be suitable for all types of campaigns; either very cheap or expensive depending on the size of your organization.
Fees: There are two price models each having different amounts of service—Essential ($79/month) and Accelerate ($119/month).
7. Crowdcube
Type: Equity-based
Description: Crowdcube is a platform that connects investors to campaigns, who then become official shareholders. Crowdcube has always been known for transparency, and hence gives its investors an introductory questionnaire to streamline their investment decisions.
Focus: European startups.
Pros: It is widely regarded as a reliable platform (a certified B-Corp and over 8,000 reviews give it a rating of 4.5 stars on average).
Cons: They advertise themselves to investors who can be deemed “sufficiently sophisticated” so as to appreciate the risks associated with investing and “make their own investment decisions,” which may not be suitable for all individuals.
Fees: Joining is free; investment fees are at 2.49%.
8. Fundable
Type: Rewards-based + equity-based
Description: Fundable matches projects with accredited investors, which simply means individuals of a certain net worth and/or income. Very few fundraising sites offer such flexibility where an investor can go for either rewards or shares as his/her return.
Key Features Offered by the Platform:
Offers self-managed fundraising options in addition to guided fundraising options.
Pros: Establishes itself as serious and trustworthy with its clear list of prohibited projects, including contests, “get rich quick schemes,” and “miracle cure products.”
Cons: Only available to U.S.-based accredited investors.
Fees: $179/month during active campaigns plus payment processing fees.
9. StartEngine
Type: Equity-based
Description: StartEngine helps serious start-ups grow their business. This differs from other platforms because here you are allowed to buy, sell or trade shares of eligible companies (Note – SeedInvest is now owned by StartEngine)
Focus areas include:
Who should invest? Those entrepreneurs who have strong understanding about how finance works in practice.
Pros: Well-known leadership team having significant success in their respective fields of expertise.
Cons: However, it seems to be less diverse than a few other companies and its website is not as user-friendly as that of the rivals.
Fees: They have two different plans with two levels of service:
Raise up to $5M with Regulation Crowdfunding;
Regulation A+ permits raising up to $75M.
However, their pricing models are a bit more complex as you need to pay for a financial review/audit of your company. To find out more, kindly visit StartEngine’s FAQ page.
10. CrowdStreet
Type: Rewards-Based
Description: CrowdStreet – is a real estate investment crowdfunding platform online. Since its establishment, the company’s team has published 177 offerings from 343 sponsors or developers who have raised more than $4.3 billion of investment capital.
Focus: Accredited investors looking to build a portfolio in private real estate.
Pros: May be less risky than stock market investing and attract investors
Cons: Exclusively for accredited investors interested in real-estate ventures; non-transparent pricing.
Fees: No general information available on the website–fees are tailored to each fundraiser and its needs.
Crowdfunding Mistakes to Avoid
The following examples of the top crowdfunding platforms for startups and individuals will help you understand how exciting crowdfunding can be; although, do not forget about staying flexible and open-minded when it comes to this kind of funding. Mind you, plenty of people are getting involved into your special project.
On one hand, setting an unrealistic fundraising goal or timeline can have a wide negative impact on your investors. On the other hand, trying too hard with rewards can ultimately cause you to fail achieve your fundraising target as well. In order to strike a balance, weigh all possible alternatives during any stage of Crowdfunding process.
Tips on Running a Successful Crowdfunding Campaign
To run a successful campaign you need organization first and foremost. Backers are usually attracted very early by being pro-active if you are organized enough at that point. Besides, organization enables one to plan and make a perfect pitch which is inspirational therein lies the essence of systematic nature in building trust between backers and firm through drawing potential investors on board.
Conclusion
Therefore, one could say that the best crowdfunding calls for organization as well as patience. 10 best fund raising platforms were kickstarted in our research for every startup entrepreneur out there.
Overwhelmed about where to start? Check out this list that features some of the best crowdfunding sites for startups. Besides, we have included all the key features of each site plus their pros and cons. Bear in mind that there is no perfect platform, so conducting your own research pays off.
