Guide

Crowdfunding

Things to consider when choosing a crowdfunding website

As crowdfunding becomes a more popular form of raising finance for business projects, there are a growing number of crowdfunding websites available to host your funding campaign. It is worth taking the time to research the different online platforms to find the one that will work for you.

There are a number of things to consider when choosing a crowdfunding platform, including:

Type of investors – individual, business and institutional investors can all pledge money to a project, but some platforms stick to having one specific type of investor.

Fees – different platforms have different structures to price their services. These might include arrangement fees, administration fees, legal fees, success fees, transaction fees, commission fees etc.

Type of platform – some platforms are purely a page that brings businesses and investors together. Others have a more active role such as one to one support and advice with your campaign.

Platform format and design – each website offers its own model, layout and pledge process, which attracts certain types of investors. Knowing what’s important to potential investors and which platforms they like will help determine which is most likely to lead to the funding target being reached.

Security – will investors feel secure giving money to the website? You must ensure that the platform you choose to use is secure and follows all legal requirements when handling online funding transactions.

General v niche site – different platforms focus on different types of project. There are even platforms specifically for certain types of projects, from charities to technological products.