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One in four businesses, as surveyed by the NSBA, could not receive the required funding, which restricted their growth and profitability in the future.

Raising capital for the business is a massive challenge for every entrepreneur.

Fortunately, banks are no longer your only option. There are many websites where people can make investments in your idea or your business. Crowdfunding websites are everywhere on the web these days.

What is crowdfunding?

Crowdfunding can be a way to raise funds from a vast number of individuals. A large number of people pool small, individual investments to raise the necessary capital to grow a new company or idea. Individuals, charities, and companies can launch a campaign to support particular causes, and everyone can contribute.

There are mainly four types of crowdfunding-

  • Rewards-based –  In this, people give an online contribution in return for a reward. The rewards may vary according to the contribution – but often include the product/service you offer or are planning to launch.
  • Equity funding- This method lets you raise funds from the public in exchange for unlisted shares (equity) in the business. Unlisted shares aren’t listed or bought or sold on an official stock exchange.
  • Peer-to-peer lending- Also knows as debt crowdfunding works similarly to a term loan from a bank. Here you are getting the money from an individual instead of a financial institution.
  • Donation- This type of crowdfunding is done to support an individual or organization’s charitable causes.

How does crowdfunding work?

Crowdfunding sites make it easy for an entrepreneur or small business to pitch a campaign to a global audience, many of whom can contribute financial support to the project. You can start your crowdfunding campaign by following these steps:

#1. Select the platform you want to use: Start by choosing an equity-based or rewards-based platform. Find out how long the platform permits campaigns to be running. It’s a crucial factor. What’s the maximum amount you’re allowed to contribute? Find out who will take notice of it. Certain platforms could draw different kinds of investors.

#2. Be accepted by the platform: Complete the online forms and submit any documents they require. The platforms must verify that whether you’re legitimate. A prospectus or offer letter might be needed if planning to utilize equity-based crowdfunding. The document outlines the terms regarding the funding, the required risk warnings, and cooling-off timeframes for investors.

#3. Present the pitch. Once your proposal is accepted from the site, you’ll have the opportunity to create your pitch. Describe your idea or project, as well as the reasons you’d like to raise money and the amount you’re trying to raise.

The pitching phase requires an enormous amount of work. It’s a complete marketing plan to advertise your company or your idea and attract investors. You should have at least one active social media account.

#4. Campaign result: On some social crowdfunding platforms, you can collect all the money you received in the campaign. In other platforms, you need to set a goal and only collect the cash if you achieve the goal.

When you participate in equity crowdfunding, you’re provided with a deadline to draw investors. If you succeed then, the platform hands over the money to you and issues share certificates or notes convertible to investors. If you’re unsuccessful in attracting investors, you might be allowed to extend the timeframe.

These platforms earn money through fees, such as a portion of the raised funds, plus transaction fees. They also accept equity. Certain platforms will not charge fees until you’ve achieved success.

From investors’ perspective, it is an excellent method of funding projects and individuals you believe in and are passionate about. Furthermore, crowdfunding allows investors to put small sums in multiple ventures, diversifying their portfolios while increasing the chance of receiving a large cash payout.

Although crowdfunding is a high-risk investment, investors should only put the money they are comfortable losing in the hypothetical scenario. All an investor needs is one big investment to recover the other losses and earn an impressive ROI.

Things to consider & prepare before applying for crowdfunding

Before applying for crowdfunding, it is essential to consider the capital you are looking to raise. If you’re launching a platform based on rewards, make sure to list the benefits that supporters will receive. If you’re using equity, you’ll have to specify what equity stake you have and also the price of shares – if possible.

When you launch an equity crowdfunding campaign, you’ll have to disclose your financial and business details to investors. This means you must provide up-to-date information about your company and projections and financial statements, a solid strategy for business, and businesses that are already operating an accurate estimation.

It is also important to prepare for a situation where you do not receive the requested amount.

Here we’ve put together the top crowdfunding websites for you; whether you’re financing an innovative venture, starting a business, or raising funds to support a cause or a project, there’s something in this list that you like.


Kickstarter lets creators access the resources needed to help bring ideas into reality. The company has assisted 15 million musicians, artists, filmmakers, designers, and other creatives raise $3.7 billion in funding to finance more than 143,000 projects. It’s an all-or-nothing scenario regarding funding, as you need to achieve the goals you have set within the time frame you have selected, or else the money is returned to everyone.

It’s free to set up an account on Kickstarter. However, if you are funded, an 5% charge is paid from the money you collected. In addition, you’ll be processed fees ranging from 3 and 5 percentage.


Indiegogo doesn’t only provide real-time crowdfunding; they also offer an online marketplace for innovative products. They’ve assisted entrepreneurs in raising $1 billion for over 650,000 projects. Find out if your project is viable and able to raise initial capital using Indiegogo’s “global community with early adopters.”

On this site, you do not have to stop raising funds at a specific date. There aren’t any fundraising goals or deadlines. You can use equity or securities, as well as revenue sharing or even sales of cryptocurrency. It charges a 5% platform fee and a third-party processing fee. If you’re fundraising for a cause, then you aren’t required to pay costs with Indiegogo’s partner platform GoFundMe.

Today, over 15 million users visit the Indiegogo website monthly, and around 19,000 campaigns are launched each month.

With Indiegogo accessible in more than 235 countries and territories, you can set up your campaign to raise funds through a crowdfunding campaign to fund an idea or product you’d like to introduce. To begin collecting money via the platform, you can create campaigns lasting up to 60 calendar days. The tools let you connect to other platforms, like Facebook and Google, to promote your campaign. When you’ve raised funds, you’ll be able to receive them from the bank within 15 working days.


Patreon lets musicians, artists, writers, and other creators earn money by operating an online membership service for their patrons. The income stream is generated by fans who pay you the monthly fee they choose to get exclusive events and behind-the-scenes content. Creators have raised over $350 million, and the average customer is charged a higher monthly cost than Netflix or Spotify.

Patreon is a platform for crowdfunding specifically designed to assist creatives in flourishing through helping to raise money from family and friends’ fans, admirers, and supporters. It’s completely free, to begin with, Patreon, but you will be charged a monthly fee according to which of the three plans you select. There are three plans available. The “Lite” plan is set at a 5% charge from the amount of money earned on Patron, while the “Pro” plan gets an 8% cut, while “Premium” plans cost 12% fees. Additionally, there is a processing fee of 2.9 percent and $0.30 per transaction.

Its Lite plan is geared towards creators who are just beginning their journey, and Pro will assist creators in creating membership options that aid their businesses. At the same time, Premium is designed for established creators or companies with a minimum revenue of $2500 per month through the platform and 100,000 followers on social media. All plans allow the usage of the Patreon mobile app, business tools, and much more. You can switch between Lite as well as Pro Plans at any point. The Premium plan requires three months of commitment.


Create your profile at Fundable and then select one of the programs. Companies catering to the consumer market can raise as much as $50,000 through their rewards program. It permits entrepreneurs to market their products through pre-orders and sales of products if you are a business seeking to raise between $50,000 and $10 million to fund their service, product, or B2B company. They have an equity program that permits companies to solicit investment from accredited investors.


It’s free to create your business profile, and it costs $179 per month to raise funds. There aren’t any success fees; however, there is a processing fee of 3.5 percent + $.30 for every transaction for raises based on rewards.


Start-ups seeking funding to start their journey, SeedInvest has attracted more than 500,000 investors and assisted more than 235 start-ups in raising around $300m in financial support and is regarded as the best option for start-up companies.

SeedInvest is a tool for professional, high-growth, and early-stage businesses to raise preferred capital or convertible notes. To increase equity in priced rounds, you must give the pre-money value. If you are converting notes, you’ll have to include the cap on valuation and conversion discount, as well as the term length and interest rate.

To use SeedInvest, it is necessary to fill out an application, submit it by the screening committee, and complete your due diligence before creating your profile. SeedInvest is a platform for businesses looking to grow, and you can expect that the application process will take a minimum of 60 days to finish.

Based on the amount you raise, there’s a 7.5 percentage placement fee and is only due upon the campaign’s successful conclusion. Additionally, you can expect 5 percent warrant coverage, dependent on the amount you raise and up to $10,000 in due diligence marketing, escrow, and legal reimbursement costs.


StartEngine is a top choice for investors looking to put a certain amount of money. It is a platform that allows users to invest in start-ups at the beginning of their development. It allows ordinary people to invest their money directly into companies or start-ups that you like and receive equity back starting as low as $100 at the beginning. This easy-to-understand approach to investing is why we chose it as the best crowdfunding platform for investors.

You can begin investing with any company featured on the website, ranging from biotech companies to tourism and travel start-ups starting at as little as $100, contingent on the share price that is listed for the company. To assist you in making an informed decision, every company’s profile contains its value, price per share, number of shareholders, and many more.

If you’re ready to invest, then hit on the “Invest Now” button and begin with filling in your details and a payment method. If you’re a start-up seeking money, you will be glad to know that it has assisted businesses in raising funds via its network of over 300,000 investors.


GoFundMe has assisted people in raising money to cover everything from personal healthcare expenses to ensuring local businesses thriving. It was founded in 2010 and has raised over $9 billion in donations from more than 120 million gifts. The platform’s popularity and ease of use make it the ideal venue for people to make donations.

It is possible to set up a GoFundMe page in just three easy steps. Start by creating your campaign by describing the amount you’d like to raise. Then, you could tell your story and pitch to impress potential investors. This may include images and videos. In the last step, communicate your campaign to your family and friends using social media platforms, text messages, and email.

You can track the funds you receive through the dashboard, from which you can write thank-you notes, withdraw funds, and do a lot more. One advantage of GoFundMe compared to other platforms is that it does not charge a fee. However, the company charges processing fees that are 1.9 percent and $0.30 for each transaction. You can raise funds for whatever time you’d like. There are no deadlines or time limits.

GoFundMe provides 24/7 support should you require any assistance with creating your page or have any other questions.


EquityNet allows entrepreneurs to connect with accredited investors to raise capital for business. It has been operating since 2005 and currently has over 250 investors registered on the platform. In contrast to other crowdfunding platforms, EquityNet accepts all legal and ethical companies that sign up and does not take commissions.

There are three plans that you can choose from, including Basic, premium DIY, or Full-Service. They are available for free or $2000+, which means you can pick an EquityNet plan for start-ups at every stage of maturity. There’s no fee for the platform or commission. However, you may have to pay a monthly subscription fee of $199 per year to use their more sophisticated features.


Crowdcube is an equity crowdfunding site designed to convert your family, friends’ customers, friends, and fans into investors. They’ll help you establish reasonable goals, an appropriate valuation, a convincing pitch, and an effective communications plan to tap into Crowdcube’s investor network.

The public will be notified when your pitch is at 20% of the target you have set. If you don’t feel that’s enough encouragement, the average pitch will reach its goal in 22 days. If you’re at 75%, the legal team of Crowdcube assists you in finishing your campaign swiftly. It supports seed, earl, and growth-stage financing, which means you can use the same platform even as your business grows to new heights.

There are no charges for registering your company on Crowdcube. There is a success charge of 7 percent of the amount you raise. Payment processing charges are also included.


With WeFunder, you can collect between $50,000 to $50,000 from the investors. The majority of campaigns require between one to three months to achieve their objectives. From a small eatery to tech-related start-up companies, you’ll be able to request funding from over 100,000 WeFunder investors. It’s free to establish an account on the WeFunder profile, and they don’t charge transaction or management fees. Administrative charges are paid to investors to pay the entire cost of running WeFund.

Conclusion 👩‍🏫

Crowdfunding is among the most sought-after small business financing alternatives for entrepreneurs, ambitious people, and creative thinkers. It provides alternative investment opportunities for those who aren’t able to raise funds for a business through conventional financial institutions.

Anyone can pitch their idea to anyone on the internet via crowdfunding platforms that act as an intermediary between the innovators and large crowds of investors from private sources. One of the most effective crowdfunding methods to attract the investor you are looking for is to present a straightforward and distinctive approach to the market.

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  • Ruby Goyal
    As an expert technical writer, Ruby loves to write in-depth guides on web development and online marketing. She has spent the majority of her career writing blogs, driving marketing campaigns, optimizing ad and email campaigns, and copywriting.

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