There are certainly big differences between Crowdfunding platforms. It is based on these differences that the Funding Portals compete. Each platform will tell you their offering is different and better than everyone else’s. Ultimately, the wisdom of the crowd will decide on which platforms are best. Like in many other established marketplaces, “they will vote with their feet.”
Funding Portals have their own specific visions, missions, unique selling propositions, niche marketing strategies, followings, financial successes, costs, and many other factors to consider. In order to decide upon the right platform for your project, consider the factors below.
- Establish Your Funding Time Period: The majority of Funding Portals require that you set up your campaign with a specific ending date. This is not always a bad thing as creating urgency encourages investors to hurry up and pledge.
- Rewards-based Crowdfunding: When you select rewards-based crowdfunding, you are promising your backers a valuable service or goods to be delivered at some point in the future. They need only make a pledge today. This helps you get your funding without sharing your ownership. KickStarter and IndieGoGo are a few of the well-known crowdfunding platforms that people use when they want to provide rewards in exchange for financial support.
- Equity-based Crowdfunding: Investors will have an ownership interest in your project or your company. Among the top equity-based crowdfunding platforms are Fundable and EarlyShares.
- Credit-based Crowdfunding: Investors will lend you money and are repaid principal and interest. Among the top credit-based crowdfunding platforms are Groundfloor and Realty Mogul.
- Cost of Success: While certain platforms charge set-up fees in the beginning, other platforms charge a percentage of the funds you raise. You can pay me now, or you can pay me later.
In the offline world, you would not consider selling artwork at a Real Estate auction. This same principal holds true in the crowdfunding world. The type of marketplace itself matters. There are platforms whose main concentration is to assist a startup company with an equity or debt offering, instead of a cause or an art project.
If you don't see anything that suits you here, read on to have a look at this list of online Crowdfunding platform resources.
Inc.com's Crowdfunding Map: You can find the right host platform for Crowdfunding by making good use of a smart decision tree.
Wikepedia's Comparison of Crowdfunding Services: Most likely the most current way to find the newest platforms.
Crowdfunding page for Crowdsourcing.org. One of the top leaders on the crowdsourcing and Crowdfunding trend is the exchange of information.