Crowdfunding has become an increasingly popular method of raising money among the startups. Traditional crowdfunding was through word of mouth or posters and mostly limited to friends and family of the founder. With the emergence of online crowdfunding platforms, it has become possible to reach out to a large number of people and raise higher amounts. These platforms use the power of social media to promote campaigns and find supporters who are willing to back them.
In its current form, crowdfunding can be broadly classified into two categories; reward-based and equity-based. Through reward-based crowdfunding, the issuer can return the favour to the donor through some reward like a thank you note or a gift whereas through equity crowdfunding investor invests in exchange of shares of that startup.
The reasons that crowdfunding has become popular among startup founders are
- It gives them a chance to pitch their ideas to more than one donor/investor simultaneously.
- The non-equity type of crowdfunding is free.
- It is a means to pitch and advertise ideas/products/campaigns.
- It is usually free to create a crowdfunding campaign.
- It empowers people as they can support products and campaigns they believe in and help them materialise.
- It functions as a launchpad for ideas.
Want to know which all are trendy, trusted, authenticated and responsive platforms to pitch your ideas? Impactpreneurs has come up with a list of the most promising crowdfunding platforms of 2017.
Aim: Kickstarter is one of the most popular crowdfunding platforms for creative projects like art, music, film, design etc.
Type of Campaign: Creative campaign
Fund Raised: Since its inception in 2009, it has raised $3.1 billion for 126771 projects from 13 million people.
Success Stories: Kickstarter has served as a platform to social projects like empowerment of girls by Kazoo Magazine, bringing together a city through dance by Vital Matters, solving social issues through technology, protecting history for the future, keeping cyclists safe on roads etc.
Pricing: If the campaign is successfully pitched then Kickstarter charges 5% fee of the total fund raised and 3% +$0.20 per pledge.
Aim: Ketto aims to raise funds for social and personal causes. One of the co-founders of Ketto is an actor-model, Kunal Kapoor.
Type of Campaign: Charitable and creative campaigns
Fund Raised: Currently, Ketto has raised INR 100 crore+ with 30,000+ fundraiser and 2,00,000+ supporters.
Success Stories: Ketto is Asia’s most trusted and visited crowdfunding website. Zoomcar, as a part of CSR, helped Ratna Nidhi Charitable Trust raise fund for the specially challenged people to avail them with a prosthesis.
Pricing: Ketto allows you to start a fundraiser for free but it deducts 6% fees, 3% PG Charges and service tax per donation. The pricing for individuals/corporates, NGO-Starter and NGO-Enterprise are different.
Aim: This crowdfunding platform aims to help creative Indians. Pitch their ideas to the wider audience.
Type of Campaign: Creative campaign
Fund Raised: Till 2015, Indians have funded INR 288 Lakhs in creative projects through Wishberry. Moreover, this crowdfunding platform had occupied 51% of the market shares in 2015.
Success Stories: Ravi Shankar, Head of HR Services Centre of Excellence, Infosys BPO had raised INR 42 lakhs to make an animated film in Sanskrit, Punyakoti.
Pricing: The platform charges campaign consultation, and social media and PR fees apart from 10% commission.
Aim: To democratize funding by turning passionate ideas into reality.
Type of Campaign: Creative and startup campaigns
Fund Raised: Indiegogo has raised $1Billion + for the projects from 11 million+ people.
Success Stories: Bluesmart came up with one of its kind carry on suitcase which garnered a lot of tech lovers. They managed to crowdfund $2,229,295 from their campaign.
Pricing: They charge 5% platform fees and 3% +30c third party credit card fees. Moreover, they also provide discounts to non-profit and social cause campaigns.
Aim: To provide a platform to pitch in ideas related to social and personal causes.
Type of Campaign: Charity and personal campaigns
Fund Raised: Over $3billion has been raised on GoFundMe platform by more than 25 million donors.
Success Stories: It is the world’s largest social fundraising crowdfunding platform. GoFundMe helped 24*7 home care centre for World War II veterans to raise $167,825.
Pricing: They charge 7.9% + $0.30 per donation for both charity and personal campaigns.
Aim: Provide an online platform to artists, engineers and creators to share their idea and get their idea pitched.
Type of Campaign: Social, creative and entrepreneurial campaigns
Fund Raised: Ayesha, a 17-year old girl helped NGO Protsahan to raise over INR 1,00,000 to support girls through music.
Success Stories: Stop Acid Attacks initiated a campaign to support the survivors of an acid attack. The organization pitched INR 11,79,607 raised of INR 5,00,000.
Pricing: They charge 5 % for social and 8% for creative and entrepreneurial campaigns.
Aim: To simplify the crowdfunding by using technology and local knowledge. They are all set to transform the lives of 2.2 billion lives in India, South-East Asia and Africa.
Type of Campaign: Charity, social cause, idea, event and recovery campaigns
Fund Raised: Since its inception in April 2016, the company has successfully raised over INR 4 crore.
Success Stories: Through this platform, Electric Bike Segment successfully raised over a prodigious amount of INR 1 crore.
Pricing: They charge 3000 INR, 7% and 2% of the total amount raised from the campaign.
Aim: To inspire infinite dreams, possibilities and future.
Type of Campaign: Creative and technology-related campaigns
Fund Raised: The organization has raised Rs. 1.5crores+ from 4000+ contributors.
Success Stories: Filmmaker Manjunath, Sandeep Varma raised INR 15,61,845.
Pricing: They charge INR 1499 for project submission and also offer various plans to use the platform efficiently.
Aim: It is an equity-based crowdfunding platform which links angel investors and startups.
Type of Campaign: Startup campaign
Fund Raised: $100million+ has been raised via investors for over 200 projects.
Success Stories: Play Impossible, a gaming system raised $146,983 from 210 investors. Play Impossible connects a gameball with an app through bluetooth which can be played by 5-15 years old children.
Pricing: Microventures charges 5% each from the issuer and investor for a successful raise and 10% carried interest.
Aim: To help startups raise funding.
Type of Campaign: Startup Campaign
Fund Raised: Equity Net has helped in raising about $200 million from private investors for businesses.
Success Stories: Earthwise, a Uganda-based enterprise which provides ferry service to East Africa almost pitched 100% of their goal amount, $2,000,000.
Pricing: They do not take any commission rather they have subscription facility. They have different pricing for entrepreneurs, investors and supporters.