In order to achieve small business growth, you need the right funding. Sometimes, this looks like hitching your wagon to a crowdfunding campaign.
With a growing number of crowdfunding platforms, it is often challenging to select which one would be the best fit for your small business. There are definite and significant differences in the type of funding each platform offers.
The team at Capacity knows crowdfunding, and we are happy to share a list of the most commonly used crowdfunding platforms + what you need to know about them.
How do we know so much? From experience.
We have a proven track record of successes with crowdfunding that we’ve helped facilitate, and we want your outcome to be exactly what your business needs.
If you see an asterisk beside the platform name, that means Capacity is partnered directly with that platform, which allows us to provide you perks like extra support or discounts on the platforms for your raise.
Four main types:
- Donation: Support funding; typically without payback expectations
- Rewards based: Provides tangible incentives in exchange for contributions
- Debt/Loan: Loans to be paid back over time; typically with interest
- Equity: Provides actual ownership in the company similar to what you would raise from angel or venture capital investors, except that there are typically fewer investor control rights involved.
(Digital securities, ICOs, etc. could be categorized as crowdfunding, but at the moment, most platforms aren’t widely, or easily, accessible. So they aren’t included here, yet.)
Favorites for businesses looking for significant growth funding:
WeFunder*
Supported: Equity, Debt/Loans
Range: $50k-$5M
Relevant to: Early stage, multi-sectors, known for breweries, and CPG
Process: Application, Review
Fees: 7.5%
Other: WeFunder has a 75% success rate, an ability to “test run” a campaign, and they offer many support resources.
Republic*
Supported: Equity, Rewards-based
Range: $50k-$5M
Relevant to: Early stage, multi-sector, known for game development, real estate, and crypto
Process: Very selective (95% success rate)
Fees: 6.0% plus 2% in equity (Crowd SAFE)
StartEngine*
Supported: Equity
Range: up to $5M
Relevant to: Startups
Process: Application, Review
Fees: 7.0% + 2.0% equity + $10k in deferred revenues
Other: provides marketing assistance
SeedInvest*
Supported: Equity
Range: up to $5M
Relevant to: Startups with a team
Process: Very selective (accept less than 2%)
Fees: 7.5% and 5% of equity
Favorites for businesses focused on growing locally
Honeycomb*
Supported: Debt/Loan – revenue share
Range: up to $15k-$500K
Relevant to: Locally owned small businesses
Process: Application, underwriting, selection
Fees: $250, 6-8%
Other: 83% campaign success rate
Mainvest*
Supported: Debt/Loan – revenue share
Range: up to $200k-$1M
Relevant to: Locally owned small businesses
Process: Very selective (only 5%)
Fees: 6%
Other: Offer marketing assistance
Localstake
Supported: Equity, Debt/Loans, Revenue share
Range: up to $5M
Relevant to: Locally owned small businesses
Process: Application, review
Fees: $499 monthly + $1k, 5% of raise
For businesses (or products) just launching
Netcapital
Supported: Equity
Range: up to up to $5M
Relevant to: Startups, multi-sector, known for innovation and data analytics
Process: Application, review
Fees: 4.9%
Kickstarter
Supported: Rewards based, pre-purchase
Relevant to: Startups, creative projects with a specific deliverable, typically products
Process: Selective process
Fees: 3-5% plus 3.0% transactions
Other: They have over 15M project backers so most of us are familiar with the platform, but we have seen companies (like Chattanooga’s own Sierra Madre Research) use the platform as their primary platform for rolling out each new product.
Indigogo
Supported: Rewards based, Equity
Relevant to: Startups – creative services, marketing and communications, prototyping, production, retail, licensing and distribution
Process: Selective process
Fees: 5% + payment processing 2.9% + 0.30
Other: Two types of campaigns:
1) Access whatever you raise for a higher fee
2) Target minimum raise amount for a lower fee
Fundable
Supported: Rewards based, Equity
Relevant to: Startups
Process: Application, review
Fees: $179/mo, 3.5% + 0.30
Other: This one is notable for their very low fee. (It’s not dependent on successful raise)
Peerbackers
Supported: Rewards based
Relevant to: Startups, specifically new businesses
Process: Application, review
Fees: 5% platform fee + 2.9%
Other: Marketing help, highly customizable
Crowdsupply
Supported: Pre-purchase of products
Relevant to: Startups, specifically new businesses
Process: Selective – pitch to a team of experts
Fees: 5-15% of goal plus 2.9% + $0.30/donation
Other: Option to continue to sell product on the platform after the campaign
For very small businesses
Kiva
Supported: Debt/Loans
Range: up to $15k
Relevant to: Very small businesses
Process: Selective approval
Fees: zero (not even interest)
Rockethub
Supported: Debt/Loans
Relevant to: Small businesses focused on arts & sciences
Process: Selective approval
Fees: 4% when goal met (otherwise 8%), 4.0% processing fee per donation
Other: Access to funds as you raise
Other specialty crowdfunding platforms to be familiar with
FundBlackFounder – black entrepreneurs
iFundwomen – women entrepreneurs
Appbacker, AppsFunder – for app developers
PledgeMusic, Sellaband – releasing music albums
Fundanna, Cannafunr – cannabis businesses
Experiment, Microryza – funding scientist research
Barnraiser – sustainable farming or health
Quirky – product tech ideas where you only want a royalty out of it
Platforms more suitable for personal, non-profit, or charitable efforts
Mightycause – all in one platform for non-profit fundraising
Fundly – small cause platform that is tightly integrated into Facebook
FundRazr – broadly applied platform for raising funds for causes, no platform fee
Patreon – Focused on creators, podcaster, game developers, artists. Regular donations.
Gofundme – Some businesses use this, but it’s mostly used for personal medical bills, education or a cause. Only donations from existing contacts.
GoGetfunding – Business, personal, non-profit, can keep whatever is raised (no minimum)
Reach out to us—we can help you sort through your options with a growth + success mindset.
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