In the last couple of years, crowdfunding websites like Kickstarter and Indiegogo have opened up whole new door of opportunity for budding entrepreneurs. Although they have been around for almost 10 years, only in the late 2012 did they start gaining substantial traction. With mega successful projects such as the “Pebble Time” and “Flow Hive” these websites have solidified themselves as a prominent and reliable source of funding for entrepreneurs with a dream.
So, let’s look into these sites individually to you can figure out suits you best for moving forward with your business.
After it’s inception
In Kickstarter, project creators have to categorize their products out of the 13 categories and 36 subcategories determined by the site. A specific goal and time limit has to by the creator. Only if the required funds are pledged by backers within the time limit, the entrepreneur is allowed to withdraw the money. But if the required funds could not be collected within that time, no funds are collected. Kickstarter themselves takes a 5% fee on the total amount raised while their payment processor shaves off another 3-5%.
Beginning in 2008, Indiegogo was run solely on a reward based system. That means donors and backers receive gifts or privileges for their contributions rather than equity stake at the company. Only recently after the 2016 changes in rules of
Indiegogo differs from Kickstarter in quite a few ways. For starters, projects creators can keep the amount they raised even if was lower than their set goal ( something Kickstarter doesn’t allow ). Second, Indiegogo is a little more flexible with it’s categorization policy. While in Kickstarter you have to specify a product, there isn’t that much focus on it in Indiegogo.
Just like Kickstarter, Indiegogo takes a 5% fee as well as additional fees for processing payment.
iFundWomen – Just the name alone is enough to give you an idea what this website is all about. Yes, you guessed correctly, encouraging more female entrepreneurship.
While being similar to Kickstarter and Indiegogo in
Also, they provide extra services such as startup coaching to make sure female entrepreneurs have all the fighting chance in the highly competitive startup game.
This platform is a departure from the type of crowdfunding sites we saw previously. Mainly because it runs on
CircleUp specializes in an early stage consumer products. They offer services ranging
The selection process for CircleUp is intensely rigorous. So, it’s more for startups that already found a footing and needs funds for scaling up.
SeedInvest is an equity-based funding company that focuses on technology startups.
It gives entrepreneurs access to accredited investors alongside non- accredited investors. With a 7.5% funding fee for successful projects, SeedInvest is certainly the most expensive of all the companies featured in this article. It also follows a “all or nothing” policy. As you can’t keep any fund raised if the goals are not met.
All these crowdfunding sites offer very different funding services from each other. It is up to entrepreneurs to decide what they need and choose the platform that is best suitable for their startups.
Contributor: Touseef Salam| Studying at Mawlana Bhashani Science & Technology University, Bangladesh.