Many consider that crowdfunding is the future of investing, others warn that its risks are often underestimated. There are different types of crowdfunding: reward-based, equity-based, debt-based, flexible, fixed and so on. It can all seem bewildering, but like most things the underlying logic is simple.
The most important benefit to crowdfunding is that it makes investment in small companies and startups accessible to everybody. For this reason, it is more important than ever for people to fully understand this world, as most of the negative publicity around crowdfunding is largely focused on misuse and misunderstanding of the platforms. Over here are the different types of crowdfunding platform, along with the main incumbents in each category, and which you should choose depending on your project:
Kickstarter is probably the oldest and the strongest crowdfunding platform. With over 74k Projects launched on its website, and 383M$ raised through the website for projects, Kickstarter has a success rate of 44%. It can help fund everything from films, games, music to art, design, and technology. Kickstarter is full of ambitious, innovative, and imaginative projects that are brought to life through the direct support of others.
Known more for cause-oriented and personal crowdfunding raises, GoFundMe can be a great crowdfunding platform for businesses too. Prolific, GoFundMe’s crowdfunding platform has raised over $5B for people and causes from all over the world.
Wefunder is a crowd-investing platform for startups. They help seed investors purchase stock for as little as $100 in the most promising new businesses around the country. They also help founders raise funds from their most passionate users who provide product feedback, marketing evangelism, and business connections. Right now it boasts of a huge number of investments, as written on their website.
Indiegogo is one of the world's largest and earliest crowdfunding websites. They have helped to raise millions of dollars for over 30,000 campaigns, across 194 countries. Danae, Eric and Slava each tried to raise money for something they were passionate about, but they came up short. They had great ideas, the passion to work hard, and good networks, yet access to funding through traditional channels proved limited. The trio was determined to find a solution to the problem. Indiegogo was born; the crowdfunding solution that empowers ideas and enables people to donate funds easily.
RocketHub is a crowdfunding platform for creative professionals. There are project topics tagged with various tagwords from beautiful to weird on this site. Rockethub is gaining a lot of popularity in recent times due to its continuous media exposure.
Concentrating on American startups, SeedInvest seamlessly brings together entrepreneurs and investors through an equity-based crowdfunding platform in a way that has never been done before. SeedInvest empowers entrepreneurs with a platform to pitch to millions of investors throughout the US in order to raise seed capital
Quirky is a Crowdfunding Website for Inventors. Complexities relating to financing, engineering, distribution, and legalities have stood in the way of brilliant people executing on their great ideas. Since launch in 2009, Quirky has rapidly changed the way the world thinks about product development
Based in Los Angeles, crowdfunder is a social network for entrepreneurs and investors to connect, crowdfund and grow. The company puts tools, connections and advice in the hands of business owners and investors at all stages in the life cycle of a business. Startups and small businesses can raise funds through equity, debt and contribution-based instruments. Crowdfunder is also holding a series of contests in cities around the US where local businesses compete, and get a chance to win funding upto US $500,000. This website however mainly concentrates on the US market.
Founded by serial entrepreneur Wil Schroter, Fundable investors have the opportunity to invest in small business for equity. The website is currently running a rewards-based funding platform.