Imagine pitching an idea to millions of people around the world, to an audience larger than you could ever imagine. That’s exactly what you can do with crowdfunding websites. Gone are the days where budding entrepreneurs must rely solely on loans and private investors, or the days of charities only being able to reach local communities. Sharing a philanthropic cause or a product idea to the internet can help increase the likelihood of successful funding. However, not all crowdfunding websites are created equal, so it’s important to weigh the pros and cons before committing to a site.
- Low Fees
Crowdfunding websites have different funding fees that can range from 0% up to 12% (not including processing charges) So the best way to prepare yourself before committing to a site is to read the fine print. If you use the donor-pays cost option, which is where donors can heed the extra fees, you can inform them that the extra amount they will help you by easing you of the charges set by the crowdfunding platform. - Proof from Previous Successful Campaigns
Most legitimate crowdfunding websites will provide examples of successful campaigns and testimonials from other users, and this is important to note before committing to a platform. While the testimonials are undoubtedly biased since it’s on their website, it will still provide you with the users, donors, and campaigners, which can help when doing further research. There will always be absurd outliers, e.g., the guy who raised $55,000 for potato salad on Kickstarter, the true test of a crowdfunding platform’s success is in its ability to help people raise the funds in everyday situations. - Consistency
While positive testimonials and success stories are important, so is a platform’s track record. If despite having 5 majorly successful campaigns, 100 people report unsuccessful ones, you might want to reconsider the significance of the reach that the platform provides. Look for the overall percentage of funded projects when making your decision, and keep in mind that reputable platforms will usually be transparent with that information. - Ability to Make Deadlines
Consider the platform fees, processing fees, total amount that can be kept, and the amount of time required to create a successful campaign, including the time taken to sign up, publish the campaign, run it, promote it, and collect the donations. If one of these processes will take too long on a particular platform, such as too much processing time before the donations are transferred to you, consider how that will affect your deadlines before committing a website.