8 Best Crowdfunding Sites to Help Your Small Business Grow in 2022
Crowdfunding sites are now an integral part of small businesses everywhere, as entrepreneurs can use these sites to validate their ideas and raise capital in the process. The best crowdfunding sites allow you to connect with customers directly and build a relationship with them, which in turn can lead to increased sales and repeat customers later down the line. Here are 12 of the best crowdfunding sites to help your small business grow in 2022!
5 Main Types of Crowdfunding
Crowdfunding platforms are a great resource for entrepreneurs and small business owners looking for capital. However, there is no crowdfunding site that will meet all of your needs, so it is important to do your homework and find the best option for you. There are five main types of crowdfunding platforms: Rewards, Donation/Philanthropy-Based, In-Kind, Debt/Lending, and Equity. For this guide, we’ll focus on the first four types. These types each have their pros and cons which you should investigate before making a decision. If you know what type of funding you need going into your research, it will help make the decision process much easier for you! Here is an overview of the four types of crowdfunding sites for entrepreneurs and small businesses. The first type of crowdfunding is rewards-based crowdfunding. With rewards-based, backers can receive products or experiences as well as intangible benefits like branding or marketing opportunities.
The second type of crowdfunding is donation-based or philanthropic financing where backers can provide money with no expectation for return and don’t receive anything other than social recognition from those who donate.
In the third instance, you may use an in-kind form of financing where backers provide products and services instead of cash to support your projects such as materials or expert consulting services.
Top 5 sites for each category
- Kickstarter- The most popular crowdfunding site for entrepreneurs and creatives who have developed a working prototype and an interested audience.
- Indiegogo- One of the first sites founded on the principles of equity crowdfunding, Indiegogo is best suited for any entrepreneur with a proven track record.
- YouCaring- YouCaring focuses specifically on raising money for individuals facing personal medical expenses by providing health pages where donations can be received through PayPal or Venmo.
- Patreon- This platform is great if you already have a following, as it offers benefits such as exclusive content in return for monthly patronage.
- Fundly- Fundly is another site that’s been around since 2006, but has recently expanded its business model from being just a donation website to also being able to offer customers rewards in return for their support, as well as pre-sales and event tickets.
3 General Funding Sites
- Kickstarter – This website allows you to solicit funds for your project in exchange for a gift of a product, a pre-order of that product, or the usual pledge of money. Launched in 2009, Kickstarter has funded over 190,000 projects so far and created over $2 billion.
- GoFundMe – This platform allows you to create a campaign and then build out your own fundraising webpage with an easy donation button at the top that can be shared on social media sites like Facebook and Twitter, which will be crucial when people start donating. It also allows donors to sponsor fundraising events and pages by volunteering their time or money for the cause. To date, over 250 million dollars have been raised on this site.
- Indiegogo – Another popular crowdfunding site is Indiegogo which was founded in 2008 and has helped raise more than 400 million dollars since its launch.
A major benefit of using these general crowdfunding platforms is that they don’t charge any fees for successfully raising money for your business because it’s all voluntary donations from supporters.
1 Kickstarter Alternative with Flexible Funding
Kickstarter is one of the first and best-known crowdfunding sites, but it’s not the only option available. If you’ve set your sights on a Kickstarter campaign but aren’t sure you want all or any of your funding raised this way, consider another alternative: Patreon. Patreon offers two tiers for campaign creation: creators and patrons. Creators are people with projects that need funding who pledge money to create more work; patrons make pledges with a regular payment each time they’re charged, and they get something back from their support, like early access to products or behind-the-scenes content.
2 Other Helpful Resources
Crowdfunding has changed the funding process for small businesses by allowing people, like yourself, to be the first investors. Rather than going through traditional lenders that want to see a five-year history of profitability and growth, crowdfunding gives you an opportunity to offer your money and validate your idea at the same time. Here are our 8 favorite crowdfunding sites for small businesses:
- Kickstarter – One of the most popular and most successful platforms on the market today with major investors like Google as well as tech experts like Eric Ries on their advisory team. Kickstarter is all about creativity and empowering your voice so you’re sure to find a great platform here where it can get heard!
- GoFundMe – If your goal is simple like raising enough funds to buy a new computer or hiring someone to clean your home, then this might be the perfect site for you because they will accept any project as long as there’s clear evidence that it will benefit society.