How to Choose the Right Platform for YOUR Crowdfunding Project
Getting ready to initiate a new crowdfunding campaign?
There are plenty of different platforms on which to launch your project, and it can be hard to know which one is right for you.
The first thing you need to do is determine your project parameters:
- Take some time to think about the type of project you’re raising funds for.
- Then, you also need to think about your project goals.
Here are several more tips on how to choose the right platform for your next crowdfunding exercise:
Determine Whether or not Your Idea Will Appeal to a Crowdfunding Audience
Why do pledgers back certain projects and not others?
The reality is that not all projects appeal to crowdfunding audiences.
When someone chooses to support you, it is often because they connect with:
- Your message or cause
- Your presentation and creativity
- The rewards or benefits your product or service will offer them
What this means is that you need to have an idea and a pitch that resonates with potential backers.
When you are raising funds for a specific purpose, you need to know what you’re going to do with those funds, know how to categorize the project, understand why someone would support you, and be willing to work hard to raise the funds you need, only then are you ready to move onto the next step.
You would be surprised by how many project creators don’t even think about that.
So before you do anything else, figure out whether or not crowdfunding is actually the right approach for obtaining funds for your project.
Choose a Crowdsourcing Platform that Supports Projects in Your Particular Niche, Industry or Category
A site like Kickstarter has a variety of different project categories you can choose from:
- film & video
Meanwhile, Fundable is specifically for small business crowdfunding.
If you aren’t sure, then compare and contrast a dozen or so options.
On the outside, they may look exactly alike, but even Kickstarter and Indiegogo have some notable differences.
Identify what’s different about each site, what types of projects they support, how their funding model works, and what their reward system looks like.
Choose A Platform With A Crowdfunding Model That Complements Your Project
There are a few different models of crowdfunding. These can be broadly categorized as:
- Rewards model. Sites like Indiegogo allow you to offer perks or incentives to your backers based on how much money they contribute to your project. Contributors see no financial returns on their donations. This is the most common type of crowdfunding.
- Equity model. Equity crowdfunding is where supporters can make micro-investments into the idea. StartupValley is a good example of an equity based platform.
- Donation model. Donation based models are often used for social causes – personal, community, or religious initiatives. With this model, project creators do not need to offer backers any incentives or rewards. To see an example, take a look at Gofundme.
- Lending model. With this model, backers lend a small amount of money to project creators. They are later repaid with a fixed rate of interest. This model is helpful for those who want to bypass the often lengthy process of getting a bank loan. This is how a site like Zopa works.
- Hybrid model. Hybrid crowdfunding platforms use a mix of the models already discussed. Fundable is one example of a platform that uses a hybrid model.
When you aren’t sure, it’s best to stick with the rewards model. But the equity and lending models can be great for businesses, and the donation model is great for social causes.
Now you should have a better idea of what platform to go with for your next crowdfunding exercise.
The platform won’t necessarily make or break your project, but it is a good idea to experiment.
Your first campaign won’t always be the first to succeed. If you fail, be willing to get back up and try again, and you will eventually find a strategy that works.