Best Crowdfunding for Startups 2020: 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
Kickstarter
Kickstarter
  • Icon Pros  Dark
    Strong credibility with huge funder base
  • Icon Pros  Dark
    Focus on creative arts
Best for women
iFundWomen
iFundWomen
  • Icon Pros  Dark
    Focus on women-led startups
  • Icon Pros  Dark
    Portion of fees reinvested back into businesses
Best for charities
gofundme
GoFundMe
  • Icon Pros  Dark
    Zero personal campaign funding fees
  • Icon Pros  Dark
    Keep-what-you-raise funding
Best for B2C brands
CircleUp
CircleUp
  • Icon Pros  Dark
    Focus on early-stage consumer products
  • Icon Pros  Dark
    AI-enabled startup insights
Best flat-fee option
Fundable
Fundable
  • Icon Pros  Dark
    Flat monthly fee to create campaigns
  • Icon Pros  Dark
    Campaign consulting services available

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!

Crowdfunding sites connect your startup to willing investors and fund contributors—and we found the very best fundraising sites for businesses.

Ready to start crowdfunding?

How we made our ranking
Info
To get our list of the best crowdfunding sites, we considered everything from platform fees to success rates. Learn more about our ranking process below.

The 10 best crowdfunding sites for startups

Compare the best crowdfunding sites

Site
Campaign type
Campaign/funding fees
Payment processing fees
Get started

Kickstarter

Reward

5% of the total funds raised

3% + $0.20 per pledge of $10+; 5% + $0.05 per pledge under $10

iFundWomen

Reward

5% of the total funds raised

2.9% + $0.30 per transaction

GoFundMe

Reward, donation

N/A

2.9% + $0.30 per transaction

CircleUp

Equity and credit

N/A

N/A

Fundable

Reward, equity

$179/mo. subscription

3.5% + $0.30 per transaction

Patreon

Reward, subscription

5%–12% of successfully processed payments

2.9% + $0.30 per transaction over $3; 5% + $0.10 per transaction $3 or less

Indiegogo

Reward, equity

5% of all funds raised

2.9% + $0.30 per transaction

Republic

Reward, equity

6% of the total cash funds + 2% Crowd SAFE security

2.5% per transaction

SeedInvest

Equity

7.5% of the total amount raised in a successful round

$0 for business; 2% paid by the investor

Kiva

Debt

N/A

N/A

Data effective 11/2/20. At publishing time, pricing and features are current but are subject to change. Offers may not be available in all areas.
*Fees listed for US-based campaigns.

Info
Crowdfunding basics

Not sure about some of the terms above? Jump down to our explanation of how crowdfunding for business works.

Kickstarter: Best overall crowdfunding site

  • 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

Strengths
Pro Bullet Campaigns accepted from 6 countries
Pro Bullet More than 15 million campaign funders worldwide2
Pro Bullet 2.9% payment fees
Weaknesses
Con Bullet Tricky campaign acceptance process
Con Bullet One-in-three campaign success rate3
Con Bullet 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.

Staff Writer
Cody Smith
Icon Quote  Dark
“Applying on a Kickstarter is a really easy process. Once you set up your campaign, you submit it for approval on Kickstarter. Once approved, you launch your campaign for a limited period of time (usually 30 days) and promote the hell out of it to reach your goal.

If you reach your goal, Kickstarter sends you the funding within a few days to a couple weeks after they take their cut of your funding which is 5% of funding raised.”

iFundWomen: Best for women entrepreneurs

  • 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
Strengths
Pro Bullet Flexible keep-what-you-raise funding model
Pro Bullet Commitment to reinvesting into the women-owned businesses community
Pro Bullet Extra services like startup coaching, video production, and private forums
Weaknesses
Con Bullet Access limited to campaigners in only 23 countries
Con Bullet 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.

Staff Writer
Sara Axelbaum
Icon Quote  Dark
“I’m utilizing iFundWomen, and if you haven’t heard of them yet, you will. They are a platform for female entrepreneurs, and they offer full coaching to help launch crowdfunding campaigns and an incredible network of their female business owners on Slack. I not only received invaluable advice along the way about how to maximize a crowdfunding campaign for success, but also a tribe of fellow ambitious women who were on the same journey. They also pay it forward by investing 20% of their profits back into selected active campaigns (for which mine was selected this month!).”
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GoFundMe: Best for charitable causes

  • Campaign types: Reward, donation
  • Industry focus: People and causes
  • Funds you can keep: Whatever you raise
  • Funding fees: N/A
  • Payment fees (US): 2.9% + $0.30 per transaction
  • Startup locations allowed: 19 countries
Strengths
Pro Bullet Focus on people-based charitable causes
Pro Bullet Zero funding fees for US-based personal causes
Pro Bullet Keep-what-you-raise funding model
Weaknesses
Con Bullet Minimal options for traditional startups
Con Bullet One-in-ten success rate for fully funding campaigns4

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

Although GoFundMe isn’t the right crowdfunding site 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.

CircleUp: Best for consumer brands and products

  • Campaign types: Equity, credit
  • Industry focus: Early-stage consumer brands
  • Funds you can keep: All or nothing
  • Funding fees: N/A
  • Payment fees (US): N/A
  • Startup locations allowed: Worldwide
Strengths
Pro Bullet Focus on early-stage consumer products
Pro Bullet Insights fueled by proprietary machine learning technology
Pro Bullet Unique access to startup loans
Weaknesses
Con Bullet Highly selective campaign acceptance process
Con Bullet 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 earnings of $200,000 a year or more are deemed accredited per SEC regulations. In short: accredited investors tend to have a lot of money.

Bullhorn
Legal requirements
Equity crowdfunding with accredited investors has more legal requirements than other types of crowdfunding. Equity crowdfunding sites should help you navigate many of those requirements, but you may want to check with your state to make sure there are no additional state-level requirements you need to know.

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.

Fundable: Best flat fee option

  • Campaign types: Equity, rewards
  • Industry focus: Healthy startups ready to expand
  • Funds you can keep: Whatever you raise for equity; all or nothing for rewards
  • Funding fees: $179 monthly subscription
  • Payment fees (US): 3.5% + $0.30 per transaction for reward campaigns
  • Startup locations allowed: Must be headquartered in the US
Strengths
Pro Bullet Low, flat monthly fee for fundraising
Pro Bullet Excellent customer service
Pro Bullet Consulting to help startups create great campaigns
Weaknesses
Con Bullet Flat fee that penalizes unsuccessful fundraisers
Con Bullet No automated unsubscribe options

Most crowdfunding platforms, whether they’re equity or reward crowdfunding, take a percentage of the funds you raise. Fundable takes a different approach. It charges a flat monthly subscription. As long as you’re subscribed, you can create campaigns to raise money (though Fundable will have to manually approve your campaign after verifying it meets its terms and conditions).

Fundable’s flat fee makes it a great deal for many successful crowdfunding campaigns. If you set a goal of just $3,580, that fee comes out to about 5% of what you raise (comparable to other platforms). If you make it to $10,000, the fee is less than 2%.

The only problem? You pay the fee whether you’re successful or not. A failed campaign will lose you money, so Fundable is best for startups that have a lot of confidence in their ideas.

And if you’d like a little extra help with your campaign, Fundable offers consulting services. It will do everything from design assets to market your campaign. These consulting services do cost more than Fundable’s monthly fee, but you’ll have to contact Fundable to get the exact cost for your startup.

Honorable mentions

Patreon

  • Campaign types: Reward, subscription/donation
  • Industry focus: Artists and creators
  • Funds you can keep: Whatever you raise
  • Funding fees: 5% to 12% of successfully processed payments (depending on plan)
  • Payment fees (US): 2.9% + $0.30 per transaction over $3; 5% + $0.10 per transaction $3 or less
  • Startup locations allowed: Worldwide

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.

Indiegogo

  • 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): 2.9% + $0.30 per transaction
  • Startup locations allowed: Worldwide

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.5

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.

Republic

  • 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 + 2% Crowd SAFE fee
  • Payment fees (US): 3.5% per transaction
  • Startup locations allowed: United States

As an equity-focused crowdinvesting platform, Republic is the new kid on the block. And with 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.

SeedInvest

  • Campaign type: Equity
  • Industry focus: Technology startups
  • Funds you can keep: All or nothing
  • Funding fees: 7.5% of successful campaigns + 5% equity fee
  • Payment fees (US): $0 paid by the startup; 2% paid by the investor
  • Startup locations allowed: United States

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.

Kiva

  • Campaign type: Debt
  • Industry focus: Startups interested in microloans
  • Funds you can keep: All or nothing
  • Funding fees: N/A
  • Payment fees (US): N/A
  • Startup locations allowed: United States

When it comes to debt crowdfunding, nonprofit Kiva just might be your most affordable option. Successfully funded Kiva campaigns give your startup a loan—and not just any loan, but one with 0% interest.

So while you’ll have to pay back your Kiva loan, there are no funding fees or payment fees for you to worry about. Instead, you can focus on building a successful campaign. And since Kiva requires you to prove your social capital by kicking off your campaign with donations from family and friends, that means convincing people you know to fund your business.

Note that Kiva loans top out at $10,000. If you need big bucks, Kiva’s not right for you. But if you want affordable debt crowdfunding for your small fundraising goals, Kiva’s worth a look.

Our methodology

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)

Crowdfunding for business 101

Now you know which of the popular crowdfunding sites are worth your time. But before you start a crowdfunding campaign, let’s brush up on the crowdfunding basics.

Types of crowdfunding

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.

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

  • Rewards crowdfunding: 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 crowdfunding: 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. That may mean treating your contributors like minority shareholders—with all the associated reporting duties.

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

Staff Writer
Cody Smith
Icon Quote  Dark
“Our funding goal was $7,700. If we didn’t reach that goal, we didn’t get any money. Some might see that was a bad thing and choose a different crowdfunding platform. We loved it because it forced us to really think through our entire business plan. You also take it way more seriously when there is a definite consequence for not meeting your goal: no funding.”

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.

Bullhorn
Crowdfunding vs. peer-to-peer lending

Peer-to-peer (P2P) lending is another way to fund your business through private investors. In P2P lending, individuals and groups extend business loans to businesses to earn money via interest on the loan. Unlike crowdfunding, P2P lending generally has a formal application process with a quick funding turnaround.

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.

Why crowdfunding is good for businesses

First of all, crowdfunding is one of the few ways that a startup with no track record and no credit can get funded. When you apply for funding through lenders, they look at all sorts of things to decide whether or not you qualify. But with crowdfunding, the persuasiveness of your pitch is what matters—not your credit profile.

Crowdfunding can also 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 for startups, 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 of dollars, but there are plenty of crowdfunding success stories 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.

FAQs about crowdfunding for startups

What is the most successful crowdfunding site?

It’s hard to say what the most successful crowdfunding site is. In part, that’s because people define success differently. Is it the percentage of successful campaigns? The amount of money raised?

Plus, it’s hard to get good data. Most comparisons we found were using data from five years ago—which means they often include platforms that have since closed. And, you know, crowdfunding platforms don’t exactly brag about low success rates.

So rather than looking for the most successful crowdfunding site, we suggest you focus on finding the platform that’s the best fit for your needs (and we hope our rankings of the best crowdfunding sites helps).

What are the odds of getting funded through crowdfunding?

Your chances of successfully crowdfunding depend on a bunch of factors, from the platform you use to your own business strategy. That being said, the stats show that less than one-third of crowdfunding campaigns are successful.6

That might sound discouraging, but remember that you can increase your chances by having a good plan, choosing the right platform, and creating a solid campaign.

What are good alternatives to crowdfunding?

The growing popularity of online crowdfunding for startups doesn’t mean that it’s the only way to start your business—you’ve got plenty of alternatives. Other small-business funding options, like loans and lines of credit, are tried-and-true (and often less risky) sources of fuel for startup funding.

If you’re interested in a loan or line of credit for your startup, we recommend Lendio. Lendio is a loan marketplace with a quick and easy application process and personalized options for startups.

For more recommendations, check out our ranking of the best small-business loans for startups.

The takeaway

If you’re trying to raise money for your startup, the crowdfunding sites above might be just the way to do it. Many business owners can attest that there are plenty of people ready to invest in startups through crowdfunding.

And with our ranking, you can find the right platform for your business—whether that means rewards crowdfunding, equity crowdfunding, or something else entirely.

The crowdfunding industry has funded many small-businesses. Why not yours?

Not sure crowdfunding is right for you? Learn how to get a startup business loan instead.

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. The Outline, “The People GoFundMe Leaves Behind
5. Indiegogo, “Our Story
6. Entrepreneur, “Less Than a Third of Crowdfunding Campaigns Reach Their Goals

Business.org Staff Writer
Written by
Business.org Staff Writer
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