Crowdfunding for Business

Crowdfunding for business is a new emerging means of financing projects. It is a method for individuals to come together and pool their money, allowing entrepreneurs or start-up companies with great ideas but no money have access to funding for worthwhile projects. Crowdfunding has been made possible through the internet where people can visit various crowdfunding platforms, read about projects that are up for funding on them, then pledge an amount of money they wish to see the project receive in return for some reward promised by the owner of the project.

Many small businesses fail to get the funding they need from traditional sources such as banks and investors. Crowdfunding offers an alternative method of getting the capital required, but it has traditionally been used for charitable purposes or films and music albums.

Now it looks like entrepreneurs may be able to use crowdfunding options designed specifically for business start-ups:

Top crowdfunding platforms.

Kickstarter

Kickstarter is the biggest and most famous crowdfunding platform. Most well-known projects came from Kickstarter, including Pebble (smartwatch), Oculus Rift (virtual reality headset), and Twine (data logging system for the Internet of Things). Since its launch in 2009, more than 12 million people have pledged more than $2 billion, funding more than 91,000 creative projects.

Indiegogo

Indiegogo launched when all crowdfunding platforms were struggling to be legal. It was launched as an alternative to Kickstarter and other popular crowdfunding sites. The site continues to help raise money for personal causes or investment opportunities by using rewards-based crowdfunding – users get something for their donation.

Patreon

Patreon is a crowdfunding platform that focuses on creative funding content, such as webcomics and podcasts. As of January 2017, it has 1 million active patrons financing the creative work of over 100 000 creators.

Ulule

Ulule is one of the first European crowdfunding platforms and focuses on creative projects such as films, books, music, and theater shows. It was launched in France and is available in 15 other countries across Europe. A full list of supported countries can be found here.

MicroVentures

MicroVentures is a new American equity crowdfunding portal for start-ups and emerging companies looking to raise to $1 million (the cap will rise soon to $2 million). The portal invests its money into each deal it brings to market, known as the capital stack.

Fundable

Fundable offers sites that people can use to raise money for personal causes or investment opportunities. It is a crowdfunding site where funding projects are similar to Kickstarter’s work but with equity investments.

CircleUp

CircleUp was built for established small and medium-sized companies rather than early-stage start-ups, which creates an opportunity for investors who might have missed out on the first wave of Internet IPOs at the turn of the century. The platform has more than 40 brands being funded through its network, including EverlyWell (health & wellness), Fora (nutrition bars), and PillPack (an online pharmacy).

SeedInvest

SeedInvest is an equity crowdfunding portal that allows unaccredited investors to participate in start-up companies. Unlike Kickstarter, where backers can get pre-sale items like T-shirts or posters in exchange for their money, SeedInvest users invest in the company’s future and receive shares of it when they make a successful exit.

CrowdCube

Crowdcube is one of the most well-known equity crowdfunding websites, having helped raise more than 2 billion pounds since 2011. The platform works with over 1400 start-ups and has provided funding for some big-name brands, including Hootsuite (social media management), Skyscanner (flight comparison search engine), and Graze (snack box delivery service).

FundRazr

FundRazr is another crowdfunding platform, except the funding is focused on helping non-profit organizations. There are no rewards, just donations. Unlike other crowdfunding platforms, FundRazr is more developed for social media use (i.e., sharing projects on Facebook).

Crowdfunder

Crowdfunder is an equity-based crowdfunding site that connects investors with entrepreneurs to build strong, prosperous communities. The company is based out of Los Angeles and has helped fund some big-name brands like Lyft (ride-sharing), Grammarly (online grammar checking tool), and Hyperloop One (transportation concept).

GoFundMe

GoFundMe is one of the most popular personal crowdfunding platforms. As of January 2017, users have donated $3 billion to help personal fund causes such as medical treatment, public celebrations/obituaries, and education.

WeFunder

Wefunder is a popular crowdfunding portal that provides investments for early-stage companies. They also allow users to invest in private equity funds and real estate investment trusts (REITs).

RealtyMogul

RealtyMogul is a real estate crowdfunding platform that allows investors to buy shares in individual properties or pools of properties. Billionaire real-estate mogul Jillian Manus started it. As of April 2016, the platform has raised $1.4 billion for projects located in the US and Canada.

SelfMade

SelfMade is another equity-based crowdfunding platform that provides early-stage companies with high growth potential. The company claims it has helped fund over 40 companies since its launch.

FundablePro

FundablePro is another crowdfunding portal that aims to help start-up companies secure funding. However, it allows approved companies to seek up to $500k in equity. This platform only deals with accredited investors who are defined as those who have a net worth of at least one million dollars.

NickelStarter

NickelStarter is another crowdfunding site where users can raise money for projects or products they are developing. The platform’s focus is on inspiration rather than financing, so anyone can use NickelStarter without applying or submitting an idea.

Fundraise

Fundraise is a real estate crowdfunding platform that allows users to invest in commercial properties. The company claims that the minimum investment amount is $500; however, it varies depending on the project.

PatchofLand

PatchofLand works similar to Fundraise in that it allows users to invest in large-scale real estate projects, but instead of focusing specifically on commercial spaces, it provides residential options. As of January 2017, approximately $1 billion has been invested using this platform.

SelfStartr

SelfStartr works like Kickstarter by allowing entrepreneurs and start-ups to post their projects online so backers can fund them. However, unlike Kickstarter, which only deals with creative projects (i.e., films, music, games), SelfStartr provides entrepreneurs with creative or innovative ideas (i.e., technology, software) the ability to receive investments.

Give us your receipts

Please give us your receipts works like Kickstarter in that it allows backers to donate money to their favorite creative projects. However, this platform is slightly different due to its focus on sustainability. Instead of rewarding backers for donating, they instead encourage people to post pictures of receipts from businesses that are harming the planet so the public can avoid shopping there.

Upstart

Upstart allows users to invest in promising individuals rather than ideas. Users can choose which individual they would like to give funding to based on their risk level or qualifications. For example, a college student may be at higher risk because they don’t have experience running a business yet. This platform also allows backers to share their connections within the Upstart community, so entrepreneurs with viable business plans are easier to find.

In conclusion, crowdfunding is a great alternative to traditional raising capital for companies and projects because it creates a win-win situation for all involved.