Best Crowdfunding for Startups: How to Fund Your Small Business


There are over 600 crowdfunding websites worldwide.1 We’ve got your primer for picking the right platform to kick your startup into business.

  • Best Overall Crowdfunding Site
    Strong credibility with huge funder base
    Focus on creative arts
    Apply NowLearn More
  • Best for Women Entrepreneurs
    Focus on women-led startups
    Portion of fees reinvested back into businesses
    Apply NowLearn More
  • Best for Science and Education
    Worldwide campaign and funder base
    Keep-what-you-raise funding
    Apply NowLearn More
  • Best for Charitable Causes
    Zero personal campaign funding fees
    Keep-what-you-raise funding
    Apply NowLearn More
  • Best for Consumer Brands
    Focus on early-stage consumer products
    AI-enabled startup insights
    Apply NowLearn More

So you’ve decided to start a business. Your startup idea has brilliant potential, and you’re ready to rake in those millions. But hold on—where are you going to get the cash to do it? Unless you know some deep-pocketed angel investors or venture capitalists, it’s time to appeal to the masses!

Once you’ve researched your industry, determined a viable product-customer fit, and finished writing a business plan, it’s time to get funded.

(By the way, you followed our startup checklist, right?)

Crowdfunding sites connect your startup to willing investors and fund contributors. And we found the cream of the crop.

To determine our list of the best crowdfunding sites, here are some of the factors we considered:

  • The campaign types (reward, equity) and business locations allowed on the site
  • The funding and payment processing fees the site charges startups
  • Whether the startup can keep all funds raised (as opposed to an all-or-nothing model)
  • The size and public reputation of the site (via CrowdsUnite)
  • The site’s campaign success rate (if available)

Compare the best crowdfunding sites

SiteCampaign typeIndustry focusCampaign/
funding fees
Payment processing feesGet started
KickstarterRewardCreative arts5% of the total funds raised3% + $0.20 per pledge of $10+, 5% + $0.05 per pledge under $10Start a Campaign
iFundWomenRewardWomen-led businesses5% of the total funds raised2.9% + $0.30 per transactionStart a Campaign
RocketHubRewardScience, arts, education, business, social good4% of fully funded campaigns, 8% of partially funded campaigns4% per transactionStart a Campaign
GoFundMeReward, donationPeople, charity, causes 0% of personal campaigns, 5% of charity campaigns2.9% + $0.30 per transactionStart a Campaign
CircleUpEquity and creditEarly-stage consumer goods Not availableNot availableStart a Campaign
PatreonReward, subscriptionArtists and creators5% of successfully processed paymentsVaries, but 5% per transaction on averageStart a Campaign
IndiegogoReward, equityTech and innovation, creative works, community projects5% of all funds raised3% + $0.30 per transaction, $25 transfer feeStart a Campaign
RepublicReward, equityNon-accredited investing for startups with a focus on diversity6% of the total cash funds + 2% “Crowd Safe” security3.5% per transactionStart a Campaign
SeedInvestEquityAccredited investing for new startups7.5% of the total amount raised in a successful round$0 for business, 2% paid by the investorStart a Campaign
PeerbackersRewardEntrepreneurs and businesses5% of successful campaigns2.9% per transactionStart a Campaign

Fees listed for US-based campaigns.

Strengths
  • Campaigns accepted from 6 countries
  • More than 15 million campaign funders worldwide2
  • 2.9% payment fees
Weaknesses
  • Tricky campaign acceptance process
  • One-in-three campaign success rate3
  • All-or-nothing funding

Kickstarter campaigns have been around for nearly a decade, and the site is probably the most well-known of any crowdfunding platform—and for good reason!

But first the bad news: completing a successful crowdfunding campaign on Kickstarter is tough. It’s a highly competitive platform that carefully selects the crowdfunding projects allowed on the site. And you can’t fund just any business on Kickstarter; you must “create something to share with others.” Your project also needs to fall under one of Kickstarter’s curated categories, like arts and crafts, fashion and design, film and photography, games, and technology.

Still, with a base of over 15 million project backers across the globe, Kickstarter’s worth a shot if you want to get your big idea in front of the biggest audience possible.

Kickstarter details

  • Campaign type: Reward
  • Industry focus: Creative arts

  • Funds you can keep: All or nothing

  • Funding fees: 5% of successful campaigns

  • Payment fees (US): 3% + $0.20 per pledge $10 and over; 5% + $0.05 per pledge under $10

  • Startup locations allowed: US, UK, Canada, Australia, New Zealand, and the Netherlands

  • CrowdsUnite rating: 7.9 out of 10 overall4

Strengths
  • Flexible keep-what-you-raise funding model
  • Commitment to reinvesting into the women-owned businesses community
  • Extra services like startup coaching, video production, and private forums
Weaknesses
  • Access limited to campaigners in only 23 countries
  • Limited information on success rate and customer experience

The name iFundWomen should give you an idea of this crowdfunding site’s focus. The founders created the platform as a “fundraising ecosystem for women-led startups and small businesses.” It also provides coaching, marketing, and other services for startup owners.

Women entrepreneurs, who own a growing share of new startups, still face significant challenges in getting enough capital to lift their businesses off the ground. iFundWomen offers a a solution to some of those challenges.

Unlike some reward-based crowdfunding sites, iFundWomen lets campaigners keep whatever funds they raise. And out of the money the site earns from funding fees, 20% goes back into supporting campaigns and services for women business owners.

iFundWomen details

  • Campaign type: Reward
  • Industry focus: Women-led businesses
  • Funds you can keep: Whatever you raise
  • Funding fees: 5% of all funds raised
  • Payment fees (US): 2.9% + $0.30 per transaction
  • Startup locations allowed: 23 countries
  • CrowdsUnite rating: Not available
Strengths
  • Funding model that lets you keep funds for partially successful campaigns
  • Worldwide access for startups and funders
  • Partnership with A&E for startup promotion
Weaknesses
  • Higher fees for partially funded campaigns
  • Higher than average payment processing fees

RocketHub is another reward-focused crowdfunding site that connects exciting startups with eager investors.

The site started with a focus on creative arts projects, but it has since expanded to funding campaigns in the science, education, social good, and other realms. The company also partners with television network A&E to support and promote startups even further.

More recently, RocketHub has begun offering a platform for equity-based crowdfunding. Entrepreneurs from all over the world can start a RocketHub campaign, and the funding fees are lower than average, at 4% for successful campaigns. Another excellent perk is that you can even keep funds if you don’t reach your campaign goal—although in that case, RocketHub takes a more substantial 8% portion.

RocketHub details

  • Campaign types: Reward, equity
  • Industry focus: Science, education, business, arts, and social good
  • Funds you can keep: Whatever you raise
  • Funding fees: 4% of fully funded campaigns; 8% of partially funded campaigns
  • Payment fees (US): 4% per transaction
  • Startup locations allowed: Worldwide
  • CrowdsUnite rating: 7.8 out of 10 overall5
Strengths
  • Focus on people-based charitable causes
  • Zero funding fees for US-based personal causes
  • Keep-what-you-raise funding model
Weaknesses
  • Minimal options for traditional startups
  • One-in-ten success rate for fully funding campaigns

GoFundMe is an internationally recognized platform for helping people around the world put their money toward charities and causes that matter to them.

Although it isn’t the right solution for every type of startup, if you’re in the business of helping people—or animals—who need assistance due to medical conditions, emergencies, or other disadvantages, it’s worth considering.

The most significant upsides to GoFundMe include zero funding fees for personal causes based in the US and the ability to keep all funds you can raise. Just be wary that likely due to the massive scale of the site, GoFundMe campaigns have a reportedly low success rate, so you’ll need to work extra hard to get people to see—and invest in—your project.

GoFundMe details

  • Campaign types: Reward, donation
  • Industry focus: People and causes
  • Funds you can keep: Whatever you raise
  • Funding fees: 0% for personal campaigns in the US; 5% for charities and countries outside the US
  • Payment fees (US): 2.9% + $0.30 per transaction
  • Startup locations allowed: 19 countries
  • CrowdsUnite rating: 7.5 out of 10 overall7
Strengths
  • Focus on early-stage consumer products
  • Insights fueled by proprietary machine learning technology
  • Unique access to startup loans
Weaknesses
  • Highly selective campaign acceptance process
  • All-or-nothing campaign funding model

If your startup is focused on building and producing consumer brands, check out CircleUp—it’s one of the best equity crowdfunding platforms around.

If you’re an entrepreneur working to get your consumer product on the market, CircleUp offers an exciting array of services, including a platform for connecting with accredited investors, insights from machine-learning technology, and access to special lines of credit for startups.

What’s so great about connecting with accredited investors? Well, only investors with net worths of at least $1 million and who earn $200,000 a year or more are deemed accredited per SEC regulations. In short: accredited investors tend to have a lot of money.

Other perks: CircleUp doesn’t charge any fees for friend and family investments and provides special access to funding through partnerships with Procter & Gamble and General Mills. On the other hand, CircleUp has a rigorous selection process with a preference for US-based businesses and massive revenue growth potential. That means CircleUp is for more established startups looking to scale—not for brand new ideas.

CircleUp details

  • Campaign types: Equity, credit
  • Industry focus: Early-stage consumer brands
  • Funds you can keep: All or nothing
  • Funding fees: Not available
  • Payment fees (US): Not available
  • Startup locations allowed: Worldwide
  • CrowdsUnite rating: Not available7
Strengths
  • Focus on giving artists and creators a steady flow of income
  • Worldwide platform with 2 million patrons
  • Keep-what-you-raise funding model
Weaknesses
  • Minimal options for traditional startups
  • Lack of equity investing options
  • Expensive payment processing fees

Patreon may not be the best solution for launching a technology startup with high capital needs, but it’s an excellent way for creators to build an audience and a source of income.

Just about anyone in the world (who’s at least 13 years old) can set up a Patreon campaign. And the platform is excellent for helping you fund creative projects like video and photography, music, writing, comics, podcasts, games, animation, and more.

You’re probably not going to earn colossal investments with Patreon, but you can keep all the donations you get (minus a 5% payment fee) and leave your campaign running indefinitely.

Patreon details

  • Campaign types: Reward, subscription/donation
  • Industry focus: Artists and creators
  • Funds you can keep: Whatever you raise
  • Funding fees: 5% of successfully processed payments
  • Payment fees (US): Varies, but 5% on average
  • Startup locations allowed: Worldwide
  • CrowdsUnite rating: Not available
Strengths
  • Access to millions of funders across the globe
  • Flexible campaign funding options
  • Additional marketplace and equity platforms
Weaknesses
  • High fees for partially funded campaigns
  • No personal causes allowed
  • Low success rate for fully funding campaigns

Next to Kickstarter, Indiegogo may be the best-known crowdfunding site in the world.

Initially founded to help fund projects like theater and cancer treatment, Indiegogo is now an international platform with over 9 million backers that accepts campaigns in a variety of industries, from consumer technology to community improvement.8

Most Indiegogo campaigns are reward-based with all-or-nothing funding rules. But there are options for equity investment and keep-what-you-raise campaigns too.

The downsides: Indiegogo’s success rate is measly, with reports in the 8% to 10% range. And according to some reviews, the experience for some startups has been less than favorable, partly due to the high fees for partially funded campaigns.

Indiegogo details

  • Campaign types: Reward, equity
  • Industry focus: Tech and innovation
  • Funds you can keep: All or nothing; whatever you raise
  • Funding fees: 5%
  • Payment fees (US): 3% + $0.30 per transaction; $25 transfer fee
  • Startup locations allowed: Worldwide
  • CrowdsUnite rating: 6.2 out of 10 overall9
Strengths
  • 95% success rate for selected campaigns
  • Focus on diverse organizations, leaders, and campaigns
  • Access to both accredited and non-accredited investors
Weaknesses
  • Highly selective campaign acceptance process
  • Limited visibility and track record with only a few dozen companies funded

As an equity-focused crowdinvesting platform, Republic is the new kid on the block. And with only 46 fully funded campaigns under its belt and a highly choosy curated selection of companies, it’s not for everyone.

But for growing US companies with enormous revenue potential, Republic’s 95% success rate for selected campaigns make it one of the most enticing platforms for connecting with willing investors.

Republic also puts a focus on diversity and looks for organizations with diverse teams.

Republic details

  • Campaign types: Equity, reward
  • Industry focus: Startups with a focus on diversity
  • Funds you can keep: All or nothing
  • Funding fees: 6% for the startup
  • Payment fees (US): 3.5% per transaction
  • Startup locations allowed: United States
  • CrowdsUnite rating: Not available
Strengths
  • Focus on technology startups
  • Access to both accredited and non-accredited investors
  • Low payment processing fees
Weaknesses
  • $100k minimum for campaigns
  • Expensive funding fees
  • US-based incorporation requirement

Founded by MBA graduates and experienced investors, SeedInvest started as a way to give technology startups access to capital from people willing to make sizeable equity investments.

The platform allows only US-based businesses and employs a picky selection process. To start, you need at least a minimum viable product or prototype, proof of concept, and two or more team members. If you make the cut, you’ll get access to both accredited and non-accredited investors for campaigns starting at $100,000.

SeedInvest’s biggest drawback is its expensive 7.5% placement fee on all successfully funded campaigns. Still, the site has a growing base of investors and successful companies, as well as a positive reputation.

SeedInvest details

  • Campaign type: Equity
  • Industry focus: Technology startups
  • Funds you can keep: All or nothing
  • Funding fees: 7.5% of successful campaigns
  • Payment fees (US): $0 paid by the startup; 2% paid by the investor
  • Startup locations allowed: United States
  • CrowdsUnite rating: 9.5 out of 10 overall10
Strengths
  • Funding model that lets you keep funds for campaigns that are at least 80% successful
  • Low payment processing fees
Weaknesses
  • Limited track record for campaign success
  • Selective campaign acceptance process

Peerbackers is another newer reward-based crowdfunding site, so it doesn’t have the track record that many other platforms have.

What it does offer you, however, is access to funds for a wide range of products and campaigns. Plus Peerbackers provides special consulting services for entrepreneurs, investors, and financial executives.

Peerbackers also provides flexible funding options. You can keep all the funds you raise from campaigns that are at least 80% successful, so you don’t have to worry about ending up with nothing if you can’t quite hit your original goal. And your funders pay only a flat 2.9% fee for processing payments.

Peerbackers details

  • Campaign type: Reward
  • Industry focus: All
  • Funds you can keep: All or nothing; keep if 80% successful
  • Funding fees: 5% of successful campaigns
  • Payment fees (US): 2.9% per transaction
  • Startup locations allowed: Worldwide
  • CrowdsUnite rating: Not available

What is crowdfunding, and how does crowdfunding work?

It used to be that the only ways to start a company or small business were to (1) spend your personal cash; (2) ask friends, family, and neighbors for money; or (3) get a loan from a bank.

But just like how technology and the web have revolutionized everything from socializing to travel, funding a new business has changed too—enter the crowdfunding industry.

You can use crowdfunding services to jumpstart your success. Crowdfunding portals that are built like social media sites connect you to investors and other folks willing to help small-business owners get products and services into the market.

Crowdfunding can help you streamline the process of taking a proof of concept to prospective investors to see if there’s a chance for success. And in some cases, with equity crowdfunding, the investors may help you flesh out your business if your idea isn’t viable on the market.

By getting capital up front, product-centric businesses and capital-heavy projects can launch with rocket speed. Not every crowdfunded campaign results in millions dollars, but there are plenty of successfully funded projects that earn $100,000 or more in just a few months—that’s not chump change. Plus, your business will benefit from the credibility boost that crowdfunding sites can provide. And you’ll have an eager pool of interested customers willing to pay once your project launches.

But not all crowdfunding sites are alike. There are two main types of crowdfunding:

  • Reward: You create a campaign for your startup, then individual contributors donate funds—usually in small amounts—to your campaign in exchange for some kind of a reward. The reward could be a preordered purchase of your product, a shout-out on a website, or even a t-shirt.
  • Equity: Equity crowdfunding is popular for startups because the platform connects you to investors who are willing to make larger donations in exchange for a stake in your business.

Most platforms focus on one of these types of crowdfunding, but some offer both. And some sites allow you to keep whatever funds you raise while others only let you keep the funds if your campaign is fully successful (commonly called “all-or-nothing campaigns”).

Some sites offer other types of crowdfunding that don’t fall neatly into the reward or equity categories. For example, many GoFundMe campaigns function more like charitable contributions. And Patreon can be used to create a steady source of income for creators like artists and writers.

The right type of crowdfunding campaign for your startup depends on your size, your goals, and the amount of capital you need to get started. If you need significant amounts of cash, equity-based campaigns that offer crowdfunding investments are often the better choice. If you think you’ll be better served by pooling thousands of small donations, reward-based crowdfunding may be best.

What are the alternatives to crowdfunding?

Of course, the growing popularity of crowdfunding doesn’t mean that it’s the only way to start your business. And crowdfunding success isn’t guaranteed. Loans and other forms of credit are tried-and-true—and often less risky—sources of fuel for startup funding.

Here are three startup loan and credit options we recommend:

  • Lendio: A loan marketplace with a quick and easy application process and personalized options for startups.
  • Kabbage: An automated platform for accessing lines of credit to fund short-term needs.
  • OnDeck: An excellent choice for more established startups that need capital that adapts to your growing needs.

Check out more of our picks for the best small-business loans.


Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don’t guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

Sources

  1. Entrepreneur, “The Basics of Crowdfunding
  2. Kickstarter, “Stats
  3. Kickstarter, “Stats
  4. CrowdsUnite “Kickstarter Review
  5. CrowdsUnite, “RocketHub Review
  6. The Outline, “The People GoFundMe Leaves Behind
  7. CrowdsUnite, “GoFundMe Review
  8. Indiegogo, “Our Story
  9. CrowdsUnite, “Indiegogo Review
  10. CrowdsUnite, “SeedInvest Review
  • roman Gilz

    Hello,
    My name is Roman Gilz, I am a private investor who is in project financing and assistance to the person in all areas of activity. In case of need please contact me at the following email address: romangilz11@gmail.com