Crowdfunding is one of the most popular ways to obtain funding when starting a business or launching a startup, and for a good reason. By using crowdfunding platforms, entrepreneurs can obtain startup capital from a variety of sources in varying amounts, oftentimes in exchange for products or equity. If you’re thinking about crowdfunding your startup but aren’t sure where to start, you’re in the right place. We have researched the best crowdfunding sites for startups and compiled the pros and cons of each one.
Best Crowdfunding Platforms for Startups
Deciding to crowdfund your startup is the first step; next is deciding the right crowdfunding platform for your startup industry, fundraising needs, and eligibility. Fortunately, there are many startup crowdfunding sites to choose from in order to obtain the money you need to start a business; these are the top choices for startups, from pre-seed creative startups to high-growth tech startups.
Best Crowdfunding Websites of 2024:
1. StartEngine
Pricing: 5%–12% platform fee based on method of investment and fees associated
About
StartEngine has become a leader in the US equity crowdfunding space. According to its website, the platform has helped startups raise over $1.2 billion in funding over 1,000 rounds. This funding has been split between over 500 startup offerings available on their platform to date.
Best For
- Startups with a long-term vision
- Growth-focused startups
Pros
- The platform has an excellent reputation in the equity crowdfunding space
- The startup founder is in control of their offering
- Funding can be immediately collected after reaching $10,000
Cons
- Only US-based startups qualify
- Maximum funding amount set at $50 million under Regulation A+ and $1.07 million under Regulation crowdfunding
- Minimum funding goal of $10,000 applies
2. Indiegogo
Pricing: 5% platform fee
About
Since its launch in 2008, Indiegogo has become one of the most popular crowdfunding websites across the globe, with over 19,000 campaigns launching monthly. Overall, Indiegogo’s capabilities, flexibility, and functionality are unparalleled. Plus, as one of the largest crowdfunding platforms available across the globe, campaigns have access to a wide range of investment opportunities.
Best For:
- Startups overall
- Early-stage startups
- Startups looking to reach a global audience
Pros
- Services are available in more than 200 countries and territories worldwide
- Flexible requirements to start campaigns on the platform
- Able to connect with Facebook and Google to better promote campaigns
Cons
- In addition to the site’s 5% platform fee, there is a separate third-party payment processing charge.
- Large number of campaigns on the platform
3. Kickstarter
Pricing (US): 5% platform fee; 3% payment processing fee + $0.30 per pledge; 5% payment processing fee + $0.08 per pledge under $10
About
Kickstarter is one of the most popular and commonly known crowdfunding websites. Understandably so, the site has been in existence for over a decade and has over 15 million project backers in counting.
Best For:
- Tech startups
- Art and design startups
Pros
- Kickstarter is a trusted, well-known platform
- Accepted campaigns have access to over 15 million project backers globally
- Services are available in 25 countries around the globe
Cons
- Highly competitive, meaning the approval process for projects can be difficult
- All campaigns must fall under one of Kickstarter’s pre-selected categories
4. Fundable
Pricing: $179/month
About
Fundable offers both equity crowdfunding and rewards-based crowdfunding options for startups on the platform. Unlike many other crowdfunding platforms, Fundable doesn’t simply take a percent of your earnings; users subscribe to the platform through a monthly fee and are able to create campaigns to raise money as long as they are approved by Fundable, which is highly beneficial for successful campaigns.
Best For:
- Tech startups
- High-growth companies
- US-based startups
Pros
- Equity crowdfunded campaigns are able to keep funding if a goal isn’t reached.
- Low monthly flat fee for subscribers
- Access to additional resources
Cons
- Startups cannot keep the funding they receive if their goal isn’t met unless they partake in equity crowdfunding.
- You are required to pay the platform fee whether your campaign is successful or not.
- US-based startups only
5. CircleUp
Pricing: Commission varies depending on the amount raised
About
CircleUp specializes in equity crowdfunding, making it ideal for established and high-growth startups. The crowdfunding platform has been around since 2012 and has helped more than 500 companies raise $390 billion in funding. The platform also offers credit financing and working capital loans in addition to crowdfunding services.
Best For
- High-growth startups
- Early-stage startups
- Consumer packaged goods (CPG) startups
Pros
- Only accredited investors are able to fund projects on the platform
- Campaigns have a high success rate
- Due to a low acceptance rate for campaigns, those that are accepted have a better chance of reaching their funding goals
Cons
- Application process is extremely strict
- Only CPG startups are able to utilize the fundraising platform
6. Patreon
Pricing (US): 8%–12% platform fee depending on subscription plan; 2.9% standard processing fee + $0.30 per payment over $3; 5% micropayment fee + $0.10 per payment under $3
About
Patreon is a widely-used crowdfunding platform in communities specifically to fund creative projects and support new startups. Since its inception, the platform has facilitated over $2 billion in crowdfunding to creators from fans, family, and friends.
Best For
- Art startups
- Lifestyle startups
- Small business
Pros
- Users can set up monthly subscriptions
- Flexible funding options makes the platform ideal for creative professionals
- Available integrations make promoting campaigns easy
Cons
- High platform fees
- Not ideal for high growth startups
7. Wefunder
Pricing: 7.9% platform fee
About
Wefunder is an equity crowdfunding platform, which means that investors are rewarded with equity in the company in exchange for their funding. Alternatively, startups are also able to engage in debt crowdfunding on the site as well which means they will be responsible for paying the amount back they receive in funding. For startups that expect to see venture capital investment in their future due to rapid growth, Wefunder is the absolute best crowdfunding platform out there.
Best For
- High-growth startups
- Tech startups
- Equity-based startups
Pros
- High success rate of roughly 86%
- Access to additional resources for legal help, crowdfunding support, and more
- WeFunder isn’t super exclusive despite being an equity crowdfunding platform.
Cons
- Due to it being an equity crowdfunding platform, there are increased legal requirements.
- This is not a platform for small businesses or lifestyle startups
- There are more rules and regulations to participate in crowdfunding on this site
8. IFundWomen
Pricing: 5% platform fee; 3%–5% payment processing fee
About
IFundWomen is a crowdfunding platform built specifically for women entrepreneurs. The platform doesn’t have the experience many of the others on this list do but it does promote a keep-what-you-raise model. IFundWomen also provides extensive support for women entrepreneurs including private coaching, networking opportunities, and even vetted freelancers. The exclusive platform even allows founders to easily apply for grants if they become a member.
Best For
- Women-led startups
- Purpose-driven startups
- Food and beverage startups
Pros
- Great for women-led businesses
- Provides additional support beyond funding
- Members can keep all the money they earn from campaigns
Cons
- Typically lower amounts of capital raised on the platform
- Lack of statistics covering success rates
9. GoFundMe
Pricing: 2.9% payment fee + $0.30 per pledge
About
While not always synonymous with startups, GoFundMe is a great platform for social entrepreneurs and nonprofit organizations that want to make the world a better place and need funding to do it. Startups that are founded to help out, such as medical startups, animal startups, and eco-friendly startups, are all welcome here.
Best For
- Social entrepreneurs
- Eco-friendly startups
- Personal fundraising
Pros
- No platform fee to use GoFundMe services
- Whether or not you reach your goal, you are able to keep the funding donated to your campaign.
Cons
- Reportedly low success rate for campaigns due to saturation
- Strict requirements for campaigns on the platform meaning most startups will not qualify
10. Crowdcube
Pricing: 7% platform fee + 0.75%–1.5% completion fee
About
Crowdcube is one of Europe’s biggest and most popular equity crowdfunding platforms. It allows investors of all kinds to contribute to either a fixed income model or an equity-based model. You’ll see about 15-20 different companies advertised on the website, and you can click on each one to receive further information. Crowdcube is one of the more reliable ways to diversify a portfolio and has a track record of success.
Best For
- Early-stage startups
- Growth startups
- Europe-based startups
Pros
- Access to high reward startups with low minimum contribution amount
- Platform handles all paperwork and tax certificates
- Businesses required to give quarterly updates to investors
Cons
- Must be qualified as an educated investor
11. MicroVentures
Pricing: 5% commission fee, 2% equity fee, $1,000 or 35 basis points for escrow fee (whichever is greater)
About
MicroVentures is an equity-based crowdfunding platform that allows accredited and non-accredited investors to take part with a minimum of $100. The platform has hosted some of the biggest startups of the last decade, including Airbnb, Slack, Uber, and Lyft. Although there are a limited number of investment opportunities each year, the platform has a history of high-performing companies.
Best For
- Early-stage startups
- Late-stage startups
- Tech startups
Pros
- Available to both accredited and non-accredited investors
- Small minimum investment of $100 required for Regulation Crowdfunding
- Comprehensive due diligence for companies that apply
Cons
- Very small amount of investment opportunities available
- Not many educational resources for investing
12. Seedrs
Pricing: 6% platform fee + £2,000 completion fee; 0.5% payment processing fee
About
An equity-based crowdfunding platform located in England, Seedrs has an impressive track record and was the first crowdfunding platform regulated by the Financial Conduct Authority (FCA). The platform has raised over £1 billion in funding as of 2020 and gives investors a significant amount of information on all businesses.
Best For
- Early-stage startups
- Growth startups
- Sustainable startups
Pros
- No holding charge for investors
- Allows accredited and non-accredited investors
- Offers a secondary marketplace for buying and selling shares
Cons
- Does not have any mobile capabilities
- Amount of companies available can be overwhelming
13. Mightycause
Pricing: 0.95% platform fee + $0.29 average processing rate
About
Mightycause is unique in that it’s an online fundraising platform for nonprofits. It also provides more than just fundraising support; startups can find donor CRM, data management, marketing, and more. Mightycause is an all-in-one platform that has a number of resources and fundraising tools that can help nonprofits of all sizes.
Best For
- Nonprofits
Pros
- Offers extensive free resources for nonprofits
- Lower rates of commission for members
Cons
- No potential for high returns on investment
How Does Crowdfunding Work?
In crowdfunding, startup businesses are able to raise money from a large number of people, typically in small increments. This is done by creating a campaign on a crowdfunding platform where people can learn about the startup and make pledges to invest.
If the fundraising campaign is successful, the startup will receive the funds that were pledged. In return, investors may receive rewards or equity in the company, depending on the type of crowdfunding campaign.
Crowdfunding is a great way for startups to raise money without having to give up equity in their company. It’s also a good way to gauge interest in a product or service.
Types of Crowdfunding for Startups
Once you’ve decided that crowdfunding your business is the best option for you, your next decision is going to be the type of crowdfunding you choose. This decision will be guided by your ultimate plan for your startup as well as a few other factors, including how quickly you expect to turn a profit and your projection for the size of this profit.
It is vital to decide on the type of crowdfunding you intend to use before you choose a platform, as many crowdfunding sites are specifically geared to one method of fundraising. These are the three most popular types of startup crowdfunding:
Equity Crowdfunding
In this type of crowdfunding, you will offer equity in your business in exchange for funding. If your startup has a long-term goal and is growth-focused, this is likely the best form of crowdfunding to consider. The amount of equity you offer (and the form it takes) will be completely up to you, but you’ll have to make it worth your investor’s time and money.
Rewards Crowdfunding
This type of crowdfunding is particularly effective for creative startups and projects. Rather than offering a share in the business, you offer those donating to your cause a gift or reward in return. Of course, the reward does not need to match up in monetary value to the donation. The beauty of crowdfunding is that most donors are there for the pleasure of seeing something they believe in growing, so any reward they receive will be gratefully accepted.
Debt Crowdfunding
Instead of a startup giving up equity in their business or types of rewards, they can essentially get a loan from a crowd of investors, which acts like debt. They will have to pay off the investment over a set period of time with accrued interest. This process is more efficient and easy than getting a regular bank loan, but startups need predictable cash flow to pay the loan back on schedule.
FAQs
What is crowdfunding?
Crowdfunding is the process of funding a project or venture by raising small amounts of money from a large number of people, typically via the internet. Crowdfunding has become popular in recent years as a way to raise money for a variety of projects, including artistic endeavors, charitable causes, and startup businesses.
What are crowdfunding sites?
There are a number of crowdfunding platforms available, each with its own unique set of features. These sites broker transactions between startups and investors and provide a platform where the two can come together.
How do crowdfunding sites make money?
Crowdfunding sites make money by charging a fee to startups for listing their project on the site. They also make money by taking a commission on the amount of money raised through the crowdfunding campaign. Some platforms will even charge investors a fee for making transactions through the site.
What are the best crowdfunding sites?
Some of the most popular crowdfunding platforms include Kickstarter, Indiegogo, and StartEngine. These sites offer a variety of features that make them attractive to startup businesses and investors. There are other sites that are more popular in the region they operate, like Crowdcube in England.
Is crowdfunding a good way to raise money?
Crowdfunding can be a great way to raise money for a project or venture, but it’s not right for every situation. There are a number of factors to consider before launching a crowdfunding campaign, including the type of project you’re proposing and the audience you’re hoping to reach.
It’s also important to understand the different types of crowdfunding platforms and how they work before choosing one to use.
What are some alternatives to crowdfunding for startups?
There are a number of alternatives to crowdfunding for startups, including venture capital, angel investing, and bank loans. Each of these options has its own set of benefits and drawbacks, so it’s important to do your research before deciding which is right for you.
Best Crowdfunding Sites for Startups Methodology
The TRUiC team evaluates each startup crowdfunding platform based on the following:
- Type of Crowdfunding: Several types of crowdfunding platforms exist, such as equity-based, reward-based, and debt crowdfunding.
- Platform Fees: Each crowdfunding site will charge a different amount of fees. These can be applied to both investors and startups. Various factors influence the number of fees, including type of crowdfunding, percentage of funds raised, and whether the platform is all-or-nothing or keep-what-you-raise.
- Features: Some platforms only focus on raising funds while others provide additional resources to investors and startups, including networking events, financial support, data management, and more.
- Usability: Crowdfunding platforms that are more complex to use are often targeted toward accredited investors who are more literate in the startup financing business. Other platforms will be more accessible to everyday investors to increase the number of investors.
- Success Rates: The success rate is the percentage of projects that are successfully funded on the platform. This varies by platform and type of crowdfunding.