Crowdfunding campaigns help you raise funds to launch a new business or creative project. With crowdfunding, you don't need to give up a stake in your company to raise the money you need — making it an attractive option over the typical investor route.
Plus, the right crowdfunding platform can help you raise money in a short amount of time. Below, we explain what crowdfunding is and the best crowdfunding platforms to try.
What is crowdfunding?
Crowdfunding is the process where you raise capital from a large group of individuals. Crowdfunding is different from a venture capital firm or angel investor, which offers one large business loan to help launch a business (typically in exchange for equity in the company). Through a crowdfunding website, a large group of people each make contributions in smaller amounts — and they may not receive anything in return (other than a small gift or thank-you note).
Crowdfunding helps launch startups, small businesses, creative projects, and other business ventures.
In recent years, crowdfunding websites added tools like social media sharing, video, peer-to-peer fundraising, and email integrations to help spread the word on various campaigns.
7 of the top crowdfunding platforms ranked from worst to best
If you're launching a crowdfunding campaign, you'll need the right fundraising tools. Below, we rank the most popular crowdfunding platforms based on their fees and features.
7. LendingClub 💰
- Best for: Personal loans
- Fees: 3-6% origination fee + 8.05-35.89% APR fee + interest rate (varies)
LendingClub is an online crowdfunding platform that helps individuals raise funds for personal loans. The site helps individuals raise money to pay off credit card debt or get a loan for personal reasons, with fixed interest rates and no prepayment penalties. Technically, a business owner could use their loan to launch a new project, but typically the funds are reserved for personal use.
LendingClub is not a free crowdfunding site. The platform offers staggeringly high pricing fees — some higher than you would get from a typical credit card. The platform charges up to a 6% origination fee plus a 36% APR fee, which can crush any hopes of launching your business venture.
6. SeedInvest 🌳
- Best for: Startups
- Fees: 7.5% platform fee (placement fee) + 5% equity fee
SeedInvest is an equity crowdfunding platform that connects early-stage startups with online backers. SeedInvest accepts just 2% of startups that try to raise money through its platform, forcing the other 98% to launch their campaigns on other websites. Fundraisers can choose from three campaign options, with the minimum goal set to $250k — therefore, it's not suitable for creative projects or small business ventures.
SeedInvest charges fees to both the crowdfunder and supporters. Startups are charged a 7.5% "placement fee" when they hit their campaign goal, plus a 5% equity fee. Plus, startups are charged fees for accounting and legal, which can be as much as $10,000. Finally, accredited investors are charged a 2% non-refundable transaction processing fee, up to $300.
5. Indiegogo 🖥
- Best for: Startups and creative projects
- Fees: 5% platform fee, 2.9% + $0.30 transaction fee + transfer fee (varies)
Indiegogo is a crowdfunding platform designed to help small businesses and creatives. Through the platform, innovators raise funds for their next invention, project, or business.
The platform offers some features, allowing you to write stories, add pictures and videos, invite other campaign members, and add Google Analytics tracking code to your campaign.
Unfortunately, Indiegogo lacks basic functionality like third-party integrations, ticket registration, live streaming, and limitless payment options to help hit your target.
Indiegogo offers two kinds of fundraising — fixed funding, where you keep what you raise, and flexible funding, where you must hit your fundraising goal to keep your earnings. No matter which option you choose, Indiegogo will keep roughly 8% of your earnings, between a 5% platform fee and a 2.9% + $0.30 credit card processing fee. Plus, Indiegogo automatically keeps an additional 5% of your earnings for a reserved funds account (to be used in case of donor refunds). Even if no refunds occur, Indiegogo will hold these earnings for up to six months.
4. Kickstarter ⚽
- Best for: Creative projects
- Fees: 5% platform fee, 3% + $0.20 transaction fee
Kickstarter is one of the most well-known crowdfunding sites on the internet, helping to fund new business launches, books, music albums, and prototypes. Kickstarter offers a few basic features like a timeline, limited supporter feed, surveys, and third-party integrations. Unfortunately, it lacks various features such as ticketed events, a supporter feed with images and GIFs, and team fundraising to help hit your targets.
Kickstarter runs an "all-or-nothing" crowdfunding model, where you only keep your earnings if you hit your fundraising goal. Unfortunately, little more than half of the campaigns do so — with the other 44% having to give back all that they earned. If you are one of the lucky few who hits their targets, Kickstarter's hefty fees could charge between 8-10% of what you earned.
3. Patreon 🎨
- Best for: Artists, podcasters, and influencers
- Fees: 5-12% platform fee + payment processing fees (varies)
Patreon helps creatives who are raising funds to support their careers. With Patreon, one's "lenders" are really the artist's most loyal fans, who pay a monthly subscription fee to support their ventures. In exchange, the funders offer exclusive content — like emails, newsletters, photographs, podcast episodes, or mailed gifts — to their supporters.
Patreon's campaign pages offer several features like membership tiers, analytics, communication tools, and app integrations. Unfortunately, they don't offer peer-to-peer fundraising, ticketed events, unlimited payment options, or SMS invites to make your online fundraising efforts a success.
Patreon takes a cut from your monthly earnings, ranging from 5-12%, and therefore can’t be considered a free crowdfunding site. In addition, they charge additional fees for payment processing, which can vary by campaign.
2. Fundly 💸
- Best for: Nonprofits, clubs, politics, schools, teams
- Fees: 4.9% platform fee, 2.9% + $0.30 transaction fee
Fundly is a crowdfunding and fundraising platform aimed to help nonprofit organizations, personal causes, and organizations fundraise for a certain cause. Fundly has user-friendly features like zero-click social sharing tools, a supporter feed, a mobile app, and video.
Fundly charges hefty fees, which can make it difficult for a fundraising campaign to hit their targets. Fundly charges nearly a 5% platform fee, plus a 2.9% + $0.30 payment processing fee. In addition, Fundly only accepts payments through Stripe, which limits the ways supporters can contribute to your cause. With Fundly, you supporters can't contribute through Venmo, PayPal, debit cards, Apple Pay, text-to-donate, check, or automatic bank account withdrawals.
1. Givebutter 💛
- Best for: Startups, small businesses, nonprofits, schools, teams, clubs, and individuals
- Fees: 0% platform fee + 2.9% + $0.30 payment processing fee (covered by 95% of supporters)
Givebutter is the best crowdfunding site on the internet, because it offers the most features with the least amount of fees.
Givebutter offers a 0% platform fee, then gives supporters the option of covering any payment processing fees — and 95% choose to do so. In fact, with an average total fee of just 0.5% and no platform fees, Givebutter is the only site on this list that can be considered a free crowdfunding site.
Plus, Givebutter offers 70+ features to help you launch a successful campaign.
With perks like ticketed events, branded fundraising pages, SMS and social network invites, limitless payment options, and third-party integrations, it's the easiest (and most affordable) approach to crowdfunding online.
Ready to see how Givebutter can help launch your next business venture? Create your free account to launch your crowdfunding campaign today.
Rachel is a fundraising and marketing consultant for nonprofits whose aspiration since she was 16-years-old is simply this: help others, help others.