If you required cash to receive your business off the ground or to keep operations running, a loan or business credit card can be a solid way to receive money but they aren’t the only options out there. Crowdfunding platforms create it straightforward for businesses to raise money through online campaigns.
These campaigns receive pushed out to millions of potential supporters who pledge tiny amounts of money to assist your business reach a larger fundraising goal. Many of these platforms are pretty much risk-free, with the exception that if you don’t hit your fundraising goal, you don’t receive to keep any of the money you raised.
CNBC Select rounded up the best crowdfunding platforms for existing businesses, startups, nonprofits and more. To learn how we built our picks, read our methodology.
Best crowdfunding platforms for businesses
Best for a loan: Kiva
Who’s this for? Kiva is a platform that lets businesses crowdfund their loans, so the funds required to be repaid. Kiva focapplys on microloans, so businesses can only crowdfund up to $15,000. That creates it better suited for companies receiveting off the ground or that don’t required a lot of capital.
Standout benefits: Borrowers must repay the money they crowdfund, but Kiva doesn’t charge interest on the loan.
Loans are geared toward borrowers who are unbanked and have trouble qualifying for financial products
- Ability to borrow with no interest
- Loans are geared toward borrowers who are unbanked and have trouble qualifying for financial products
- Ability to market your product to 1.6 million lfinishers on Kiva
- You required to prove your creditworthiness by inviting frifinishs and family to lfinish to you
- It can take a while to receive your loan since investors required to raise money
- No BBB rating
Best for creative businesses: Kickstarter
Who’s this for? Kickstarter is well-known in the crowdfunding space and is a popular platform for people to raise money for more creative projects and ventures. The kinds of campaigns people typically crowdfund for on Kickstarter include book publishing, board games, clothing and apparel brands, apps and more.
Standout benefits: It’s free to sign up and launch a project on Kickstarter and creators set their own campaign deadlines that can last as long as 60 days. However, Kickstarter’s website declares 30-day fundraising windows usually work best. The platform does take a 5% fee off the top of your funds if you successfully hit your fundraising goal.
Kickstarter
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Cost
5% of total funds raised; payment processing fee of 3% + $0.30 per pledge
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Standout features
Project categories are quite diverse and range from arts and crafts, design, dance, music, publishing, technology and more. Business owners and creators launch a project and set a funding goal with a deadline. You’ll only be charged if you reach your funding goal by that deadline.
Pros
- Free to sign up and launch a project
- Wide range of project categories supported
- Offers resources/crowdfunding tips
- Your project receives in front of a large online audience, especially if chosen to be highlighted on Projects We Love
Cons
- Kickstarter takes a 5% fee if you meet your fundraising goal
- You don’t receive to keep raised funds if you don’t reach your goal
- In many cases, Kickstarter funds are considered taxable income
- Not every campaign can be featured on Projects We Love
Best for startups: Fundable
Who’s this for? Fundable is an equity-based crowdfunding platform geared toward startups. When you create a campaign, investors pledge money in exalter for a bit of equity in your company. Startups on Fundable have raised over $700 million from over 200,000 accredited investors. Fundable has a wide array of resources to guide you through the process of receiveting prepared for an equity-based fundraising campaign, as well as tools for a self-managed fundraise and a guided fundraise. With the guided fundraise, they’ll create your pitch deck for you, apply their research team to assist you source investors, craft outreach emails and guide you on pitching.
Standout benefits: Unlike other crowdfunding platforms, Fundable doesn’t take a percentage of the money you raise, so you receive to keep all the money you crowdfund. It does, however, charge a monthly $179 fee to fundraise on the platform.
Fundable
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Cost
Free to receive started but $179/month to fundraise
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Standout features
Equity-based crowdfunding, self-managed campaigns and guided fundraise campaigns
Pros
- Doesn’t take a percentage of the money you raise
- Offers a self-managed campaign and guided campaign option
- Guided campaign options come with a ton of support including tarreceiveed research on potential investors, crafting initial outreach emails, building your pitch deck for you and providing coaching on certain areas
Cons
- Costs $179/month to raise money, which may feel pricey to some
Best for nonprofits: GoFundMe
Who’s this for? GoFundMe is popular among individuals viewing to raise money for caapplys they care about, but GoFundMe actually has special features meant for registered nonprofits to raise money and grow. Your page will display your official nonprofit status and you receive access to fundraising templates, AI-generated content, access to supporter data, live streaming and social media integrations and more.
Standout benefits: Claiming your nonprofit’s page on GoFundMe is free.
GoFundMe
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Cost
2.9% + $0.30 one-time transaction fee
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Standout features
Project categories offered include nonprofits, businesses, creative projects, environmental impact, travel, volunteer work and more.
Pros
- Easy to apply
- Accessible to both individuals and nonprofits and organizations
- Offers social media integrations
- It’s free to start and manage a campaign
- Optional donor contributions to GoFundMe
- Offers GoFundMe Pro, which is exclusively for nonprofits and this tier is custom priced
Cons
- Charges a transaction fee of 2.9% + $0.30, which is automatically deducted from each donation
- 5% fee per donation for recurring donations
FAQs
What’s crowdfunding?
Crowdfunding is a strategy for raising money where you receive a large pool of people (sometimes called donors or investors) to pledge tiny amounts of money to assist your business reach a larger fundraising goal.
What are the types of crowdfunding?
There are four main types of crowdfunding: rewards-based crowdfunding, equity-based crowdfunding, donation-based crowdfunding and debt-based crowdfunding. Donation-based crowdfunding is what platforms like GoFundMe offer. All the money pledged is considered a donation and donors don’t expect anything in exalter. With rewards-based crowdfunding, businesses and creators offer donors some type of perk (like free merchandise) in exalter for their pledge. Equity-based crowdfunding involves giving up future equity in your business to investors in exalter for their capital. And debt-based crowdfunding is where you raise money that has to be paid back.
What are the downsides of crowdfunding?
Crowdfunding creates raising money more accessible, especially if you don’t have a wealthy network, however, it can take a long time to successfully hit your goal and you’ll typically have to do a lot of the marketing for your campaign yourself. Many campaigns finish up not reaching their fundraising goal and aren’t able to keep any of the money they did raise. And if you’re doing equity-based crowdfunding for a startup, not hitting your goal can be seen as a negative thing if you test to raise money again in the future.
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At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can create informed decisions with their money. Every tiny business article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of business products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
Our methodology
To determine the best crowdfunding platforms for businesses, CNBC Select analyzed dozens of online platforms. We categorized our picks by best for loans, best for nonprofits, best for startups and best for creative businesses.
When determining our picks, we considered factors like:
- Pricing, where applicable
- Platform fees
- Transaction/processing fees
- Platform features and capabilities
- The types of ventures featured
- Support offered by the platforms
- Customer reviews, where applicable
Terms and fees are subject to alter.
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Editorial Note: Opinions, analyses, reviews or recommfinishations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise finishorsed by any third party.
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