howtochoosetherightcrowdfundingsite

When it comes to online crowdfunding, it’s extremely important to conduct your due diligence and find a site that works well with your particular business or campaign. But there are so many different crowdfunding sites available right now – how do you even begin to choose one? We’ve put together some important things to consider to help guide your search.

What crowdfunding model are you going to use?

  • This is simple – make sure you know what type of crowdfunding you want. Do you want the crowd to be actual investors in your company (in return for ownership) or instead receive perks and rewards for their contribution ? Or perhaps you want to go the more traditional donation route and hope that others will simply donate to your cause. The crowd plays a very different role depending on the model you use, and different sites cater to these very different models.
  • Additionally, if you are going to go the investment / equity route and offer ownership in your idea, know the laws. This enters the realm of investing and securities regulations.
  • For rewards and perks-based crowdfunding, you’ll need to choose all-or-nothing, keep everything, or some other hybrid model. Some platforms may actually have their own unique model. Make sure you know exactly how the crowdfunding site handles funding goals and what conditions need to be satisfied before you receive the funds.

Find a site that caters to your specific industry / niche

  • There are all-encompassing crowdfunding sites that accept campaigns in any category, and then there are sites that focus on only one or two specific niches. A larger, more general platform may have more users and eyeballs, but a niche site can bring a more targeted audience. We have over 100 crowdfunding sites listed in our crowdfunding database and some are really laser-focused on one niche (example: journalism, books, music, games, etc.)
  • Similarly, crowdfunding is a global phenomenon. But you may have reasons for wanting to use a platform that is in your country or state. Maybe you want a staff that is fluent in your native language and operates in the same timezone. Another reason may be for legal recourse and liability issues.

Features, tools, and value-added services

  • Many crowdfunding sites now go beyond the basic platform services and offer a full suite of services. This may include consulting, legal assistance, incorporation / filing, research tools, courses and training, and special promotional offers. Essentially, these sites are acting as “incubators” to really help you throughout the entire process. Is this important to you, or would you rather just post your campaign and do-it-yourself ?

Fees

  • The fee setup can vary from site to site. Most take a percentage of the funds raised, but this often depends on whether the campaign is successful or not. Some charge a fixed fee upfront – similar to a membership arrangement. And others combine these or other concepts.
  • Most crowdfunding sites use third-party payment processing services, which may in turn charge their own fees. Know how much so you can budget accordingly and prevent unwanted surprises

If you go with a new site or smaller niche site, research the company

  • Because of powerful turnkey crowdfunding software and wordpress themes, new crowdfunding sites are launching every single day. If you are considering a new platform or one that is less popular, make sure you research the company, its staff, and founders. Check online reviews. We’ve seen many platforms launch that have barely any information about the site’s creators, location, and history, and hardly any way to ask questions or get support. You’ll be disclosing your idea and business to them and trusting them with your funds throughout the entire process. There are some really cool ideas and twists on the crowdfunding process being introduced by entrepreneurs around the world, but if it doesn’t pass the smell test, look elsewhere.