This blog serves especially for small and medium businesses, NGOs, individuals, and individuals’ need for urgent medical expenses. So they can start creating their own crowdfunding website.
Today technology has a significant impact on our daily life which is no other except for when it comes to investments. Now, the pool of investment methods broadened the opportunity for the people and to the investors, so they can diversify their portfolios in a well effective manner. Here comes the role of crowdfunding.
In 2021, its popularity and demand are exceptionally visionary for many entrepreneurs and technocrats. Crowdfunding contributes to the $65 B of the global world economy. This opens more options for people and businesses in the year 2022.
If you are a small or medium enterprise and wish to gather valuable funds for your company to grow, this platform must be your top priority.
Social media is a fruitful platform for you to schedule the campaign for crowdfunding.
Stating a crowdfunding platform is a profitable idea to reach your goal of the project.
Before starting the crowdfunding project in the coming time it’s wise to advise understanding the basics of crowdfunding and its works.
In this comprehensive guide, we are giving you the proper insight for crowdfunding website development, and for mobile platforms. Our valuable guide will help you to pinpoint the best crowdfunding source to start your own from the beginning. It will help you to move in the right direction.
But first, let’s start with the basics of crowdfunding.
- What Is Crowdfunding in Simple Words?
- How Does Crowdfunding Work?
- Is It Worth Creating Your Crowdfunding Platform?
- Market Research for Crowdfunding in 2022
- Top Platforms for Crowdfunding in 2022
- Types of Crowdfunding Model for your Business
- Monetization Models to earn for your Crowdfunding Business
- How to Develop your crowdfunding platform?
What Is Crowdfunding in Simple Words?
In simple words, crowdfunding is the medium to raise money for different causes from a large group of people. This pool of people is collectively investing their money for the project of any business. While individuals or companies or NGOs do their campaigning with specific causes and purposes. So that anybody can contribute.
Basically, it’s a better financial solution where you can gain enough capital if you have that brilliant idea to hit the crowd.
There are various industries that have to utilize their crowdfunding for business, healthcare, higher education, non-profit or charity, or even for urgent medical expenses and many more.
For Business: a big name on the list is Oculus Rift, which has driven $2.4 M funding in 2013 to take VR into accessible home gaming. They have campaigned for more than $250k.
For Art and Culture: Another example of successful crowdfunding is ‘The Veronica Mars Movie Project’ by Rob Thomas. Successful crowdfunding of $2M helps to gain popularity on the international platform.
How Does Crowdfunding Work?
Steps to starting your crowdfunding campaign:
- Place your story: Prepare a comprehensive narrative that explains your cause to target investors from everywhere.
- Marketize your campaigns: You need a reliable way to place and promote your plan. For that marketing tactics is equally important to get people’s attention. A quick way is to use rewards-based crowdfunding to divert more people to contribute to your campaign.
- Make a funding goal: Mention the exact amount you need for your cause.
- Engage your followers: Update your audience with the project’s idea progress.
- Open for feedback: Best advice helps you to grow in the right move. Open your platform for suggestions to improve the quality of your project.
In short: Crowdfunding is a path where anyone (individuals, companies, NGOs, or urgent medical expense) can raise funding using specific platforms. Or you can create your own platform where you can place your project and begin your crowdfunding. The project includes a detailed description of the cause with plans and images(if any).
Read Also: Top 10 Python Framework for Web Development
Is It Worth Creating Your Crowdfunding Platform?
If your product idea is successful or you have a valid cause, it opens many opportunities to expand your business in the future.
Crowdfunding helps in many ways, not only raising funds for the growth but also building a helpful community. Alternatively, it will lead to shine a positive light on the company.
Also, this way of funding has a lower risk compared to other ways like Angel investors or venture capitalists.
Market Research for Crowdfunding in 2022
Let’s gain some more insight into the market for crowdfunding. This motivates you to create your own crowdfunding website in 21-22.
- According to the report by EY, the global crowdfunding market size is going to reach $114B by the end of the year 2021.
- 41% of the crowdfunding is started by businesses and entrepreneurs. While NGOs contribute to raising 19% via funding.
- North America contributes $17.2 B per year to the economy as per Statista’s report.
- Overall 17% of the crowdfunding is done by smartphones.
- On average, typical crowdfunding earns $5.2k for campaigning.
- Equity-based crowdfunding is the fastest growing branch with a CAGR of 33.9% with a raised volume of $4.41 B.
- Fundera, claims that on average 47 investors are ready to contribute to crowdfunding projects.
These figures made you create crowdfunding platform development. You can either choose a trustworthy source for raising the fund for your cause or prepare the clone.
Some of the leading crowdfunding sources are Indiegogo, Kickstarter, GoFundMe, and LendingClub. These websites help you to prepare your own crowdfunding clone.
Now in the next, we’re going to understand how top crowdfunding sites play a vital role in fulfilling the needs of individuals.
Top Platforms for Crowdfunding in 2022
Top platforms are successfully raising the funds the fundraisers and benefits to both investors and fundraisers. These platforms are focused to target the right audience. They prepare the niche campaign to target the right people. Different models are for businesses, technology, research, artists, healthcare, and education purposes. Everybody needs money, and different crowdfunding App development platforms have different niche audiences to target.
Below is the list of the top crowdfunding websites to make money.
- International: Indiegogo, Patreon, GoFundMe, Fundrazr, Eureeca
- Asia: India- ketto, Singapore- give.Asia, Japan- Airfunding
- North/South America: Kickstarter, Patreon, Indiegogo, FundingCircle, GoFundMe, Fundrazr, SeedInvest
These platforms have an international audience that helps you to reach wider landscapes, and to understand the performance on all scales.
1. Kickstarter: It is one of the best fundraising platforms known to support funding for every idea or cause. Its success rate is 44%, which is fairly decent compared with the other channels. It aids funding for art and culture, technology, music, films, designs and etc.
Where Kickstarter is lacking?
Although Kickstarter has raised more than $5 B for 2 lack projects, it has lacked due to its model approachability.
In this model, if the fundraiser cants able to reach the funding goal, they would not keep the money. This becomes complicated for the people to lose the hard-worked fundraised unless they cant reach their initial funding goal. However, this reduces less risk for the contributors.
Service Fees: 5% of the total funds, + 3-5% of the processing fee.
2. Indiegogo: It is known as one of the excellent fundraising platforms and alternatives of Kickstarter. Why? Because of its is a unique model. Indiegogo allows both flexible and non-flexible fundraising. This platform inspires you to create your own Indiegogo clone development.
It has raised money for more than 80k businesses from 200 countries.
As we have mentioned, Indiegogo is divided into two models; flexible and non-flexible. In a fixed or non-flexible funding model, if your campaign is not made the limit of your goal then contributions are returned back to them.
While in the flexible funding model, allows you to keep the funds you have raised, even you cant make to touch your funding goal.
This platform has approached easy manner so that individuals contributors and gain money.
Service Fees: 5% of the total funds, + 2.9% of processing fee with $0.30 transfer fee per payout.
3. Patreon: It is a great way to add extra money to your income. Especially if you have social media networking like Youtube. Many of the successful youtube creators add Patreon to their channels.
It is the prime source to generate the source of income for artists, content creators, and musicians. In return, they reward their followers with prizes, live interactions, and many more things.
The website claims that it supports more than 2 lakh creators and artists with over million-plus patrons.
Service Fees: Starting at 5% of your monthly income + 2.9-5% processing fee + $0.25 transfer fee per payout.
4. GoFundMe: It is the best platform for social services non-profit organizations to gather funds for their special cause. GoFundMe claims that it has collected more than $9B from 120M donations till now, which is the highest amongst its category.
Service fees: No platform fee, but 2.9% plus $0.30 per transaction
Being the business proprietary or individual to start building your website from scratch it’s always wise to look at some of the best options already existing. How they bridge the gaps and support both the fundraisers and the donators.
Types of Crowdfunding Model for your Business
There are several types of Crowdfunding Application development modes that help you to raise enough amount for your cause with valuable returns to the investors.
- Donation-based: This model works with the purpose to give money to someone in need without any return. Generally, NGOs and urgent medical expenses are coming under this category.
- Debt-based: This is a form of the peer-to-peer lending model. Here the investor pays their money with expecting to get returns.
- Rewards-based: In this model, the investors or donors invest their money to get some rewards in return. Many startups and entrepreneurs have their ideas, they need to share that on some platform to get rewards or any profit in return. Or they can raise the funds to grow their business. This is one of the best methods to raise funds for the progress of the project.
- Equity-based: This platform allows the individual to become part of the business authority. If you are an investor but do not have any business, you can invest in the businesses and be a part of the owner of securities or a stakeholder of it. This one is a very preferable platform for the individuals to gain profits from investing their sum.
Monetization Models to earn for your Crowdfunding Business
Once you have finalized the relevant model for your project or cause, you will look to find a way for its monetization. You can give a track for the Campaigners to subscribe to your channel or fee some money from the collected funds.
So it’s up to you by which method you wish to gain the profit. Let’s understand some of the common monetization models in detail for crowdfunding mobile app development.
1. Commission/Success fee: Most crowdfunding businesses use this model to earn some profit. Once the target goal is achieved, you will receive a specific percentage of money.
For example, Kickstarter charged 5% of commission for every goal achieved, while IndieGoGo charged 3% of fees after a goal is successfully achieved by the fundraiser.
2. Membership fee: you can charge a small fee for the followers once they subscribed to your channel. The membership fee could be such that more people are ready to subscribe to your premium services.
For example, Patreon charged a $10-20 fee for the creators so that they can easily create their own fanbase and get paid for their services.
3. Paid services: In this revenue generation model, you can contribute to the campaigners in their management. You can help them by creating prototypes, publishing videos, ads, or branding, or messages, and likewise things. And in return, the fundraiser will return for it.
4. Advertisement and Promotions: this model helps the fundraisers to promote or advertise their campaigns on your platform if you have a good number of subscribers. This is a great way to receive a good amount of money in return. Fundraisers use your platform and transfer your money in return.
How to Develop your crowdfunding platform?
Till now we have understood about Crowdfunding and various business models help to develop the website.
There are two options for you to start your Crowdfunding website. The first one is choosing an automated way like CMS or WordPress which quickly launch the website and supports the minimalist necessary integrations required for the implementation.
But this way has some of the drawbacks like strictly no customizations, no proper implementation of tech stacks, no support of the technical team, no new features, and anything.
However, a customized platform offers much flexibility and personalization to you. If you want to create your own platform from scratch, you must choose an expert Crowdfunding software developer to add an advanced level of functionalities to the website. This saves your overhead time and leads your project to a wider audience.
Crowdfunding has something to offer for everyone. In the time of globalization, technology is booming the market of every genre. More of entrepreneurs from small and medium businesses wish to propel their excellent ideas into reality.
Funding act as fuel for their business at the initial level. They want to receive quite a decent amount of money.
Here crowdfunding plays a vital role. Both fundraisers and investors are in a profitable situation. They need to worry about their money. Different crowdfunding models help them to choose the best beneficiary method to raise money.
If you are new in the area of crowdfunding, you can connect with a come expert to pull your ideas and pick the best platform for yourself.
We at Octal IT Solution can help you brainstorm your idea of building a website or app for crowdfunding. Our experts are ready to develop a robust solution for your project.
From the list of top crowdfunding platforms, you can choose the one which is suitable for you. We have a development team to build an app like Indiegogo, which is the best platform due to its flexibility. We also offer top app development services for ewallet app.