25 Best Crowdfunding Sites for Small Businesses

Crowdfunding has taken off in the last few years. A report by Massolution estimates that by the end of 2016, crowdfunding will bring in more funding than venture capital! That’s a big deal and shows the potential in crowdfunding for small businesses. But what are the best crowdfunding sites? Below, you’ll find our list of the 25 best crowdfunding sites for small businesses.  

One downside of crowdfunding is that is can be a bit of a gamble. Another funding option for startups who need money they can rely on is a rollover for business startups (ROBS). A ROBS allows you to use your retirement savings to fund a business without early withdrawal penalties or taxes. If you have $50K+ in a 401k or IRA, get a free ROBS consultation with FranFund.

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Best Reward Crowdfunding Sites

On reward crowdfunding sites, you can list a campaign to raise funds for your business. Members of the public, called backers or supporters, can decide whether to fund you and how much they want to give. These sites are primarily designed for B2C businesses. In exchange for their support, you give rewards to your supporters, such as a free product or product sample. Most crowdfunding sites make money by taking a small cut from the money you raise.

One of the biggest distinctions among reward crowdfunding sites is whether they have an all-or-nothing funding model or a keep-what-you-raise funding model. An all-or-nothing funding model means that you only get access to funds if you achieve or surpass your funding goal. Keep-what-you-raise means that you can access any amount of money that you raise–you don’t have to meet your goal. The latter gives you more flexibility but can also leave you shorthanded if you need a specific amount of capital.

1. Indiegogo

Why We Like It: Indiegogo is currently the largest global fundraising site. The most popular types of businesses that raise money on Indiegogo are technology, design, film, travel, and eco-friendly businesses. In addition to the wide range of businesses, Indiegogo is also a good choice for female business owners –over 47 % of successful campaigns are run by women. Indiegogo is most well known for reward crowdfunding, but it also offers equity crowdfunding.

Cons: Hard to stand out since it’s such a large site.

Fees: 5 % cut from what you raise plus 3-5 % credit card processing fees.

All-Or-Nothing or Keep What You Raise? You can choose either funding model.

2. Kickstarter

Why We Like It: Almost any type of consumer small business can use Kickstarter to test the viability of its products or services with a global audience. Many small businesses first raise money on Kickstarter before they try for a loan or try to raise venture capital. A range of different types of businesses, from restaurants to design firms to craft businesses, successfully raise money on Kickstarter.

Cons: Fewer business categories than Indiegogo and no keep-what-you-raise funding model.

Fees: 5 % cut from successful campaigns plus 3-5 % payment processing fees.

All-Or-Nothing or Keep What You Raise? All-or-nothing.

3. EquityEats

Why We Like It: This crowdfunding site is specifically designed for restaurants. Restaurants are one of the most underfunded industries in the US, so it’s great to see a crowdfunding site that caters specifically to restaurants, cafes, bakeries, and food truck owners. In exchange for their contributions, your backers get perks like free desserts and credit towards food and beverage.

Cons: Not transparent about pricing.

Fees: Not provided.

All-Or-Nothing or Keep What You Raise? All-or-nothing.

4. Tilt

Why We Like It: Tilt’s fees are cheaper than most other crowdfunding sites, which is one of the main reasons why we like it. Although it’s less well known than sites like Indiegogo and Kickstarter, some big-name brands like Microsoft, Reddit, and Soylent have used Tilt to raise money. They say that the success rate on their site is 91 percent!

Cons: Less well known that larger sites, like Kickstarter and Indiegogo, so it may be harder to raise funds.

Fees: 2.5 % cut from successful campaign, plus 3 % credit card processing fee

All-Or-Nothing or Keep What You Raise? All-or-nothing.

5. Fundable

Why We Like It: While many crowdfunding sites are multi-purpose, catering to businesses, non-profits, and consumers, Fundable is exclusively for businesses. They take a pretty hands-on approach and will help you understand the fundraising process before you launch your campaign. Instead of taking a cut of money you raise, Fundable charges a flat monthly rate ($179) for access to their crowdfunding platform. Fundable offers both reward crowdfunding and equity crowdfunding.

Cons: It can be hard to stand out if you’re not a tech company.

Fees: $179/month and 3.5 % plus 30 cents credit card processing fee

All-Or-Nothing or Keep What You Raise? All-or-nothing.

6. Patreon

Why We Like It: Patreon’s crowdfunding platform is designed specifically for artists and creators. This is a good option for freelancing artists, Etsy sellers looking to raise more money, photographers, and other creative types. Your backers, called patrons (get the name?!), can fund your campaign with a set amount of money each month or on a per project basis.

Cons: Niche site limited only to artists and creators

Fees: 5 % cut from funds plus 2-5 % credit processing fee.

All-Or-Nothing or Keep What You Raise? All-or-nothing.

7. Plum Alley

Why We Like It: Plum Alley is a crowdfunding site designed specifically for women. Women in food, fashion, art, tech, and other industries have used Plum Alley to raise thousands of dollars. Only a small percentage of traditional investment and venture capital money goes to women-owned businesses, so sites like Plum Alley have stepped up to fill the void. Plum Alley says campaigns on their site have twice the success rate of the industry average.

Cons: Not a very well known site, so you might not be able to reach your funding goal.

Fees: 5 % cut from successfully funded campaigns plus 2.9 % credit processing fee.

All-Or-Nothing or Keep What You Raise? All-or-nothing.

8. GoFundMe

Why We Like It: GoFundMe is best known for raising money for personal or charitable causes, but businesses are eligible as well. While there’s no maximum to the amount of money you can raise, most businesses on GoFundMe are raising relatively small amounts of money to fund small projects. For example, a restaurant currently on the site is seeking to raise $6,000 to replace two coolers. A mental health counselor is seeking $13,000 to transition to private practice. Have any questions while setting up your campaign? GoFundMe’s support specialists promise to respond to emails within 5 minutes from 7am-10pm PST!

Cons: May not be a good site to raise large amounts of capitall.

Fees: 5 % cut from funds and 2.9 % + 30 cents payment processing fee.

All-Or-Nothing or Keep What You Raise? Keep what you raise.

9. RocketHub

Why We Like It: RocketHub is one of the largest, broadest crowdfunding communities on the net today. They are open to personal causes, social good projects, and businesses. They have a “Success School” which helps you understand how to launch a successful crowdfunding campaign.

Cons: Fees are steep for campaigns that don’t meet their funding goal.

Fees: 4 % cut from successfully funded campaigns and 8 % from campaigns that don’t meet their goal. There’s also a 4 % credit card processing fee.

All-Or-Nothing or Keep What You Raise? Keep what you raise.

10. FundRazr

Why We Like It: FundRazr launched back in 2010, and they have helped over 60,000 campaigns across the globe raise over $86 million in funding. They are open to a variety of uses, personal and business. They make it easy to share your campaign on social media (share your whole campaign or select messages and updates) and to collect money from supporters.

Cons: Couldn’t find a way to view active campaigns on the website, so it’s unclear how active the site currently is.

Fees: 5 % cut from your raise.

All-Or-Nothing or Keep What You Raise? Your can choose either funding model.

11. Experiment

Why We Like It: Think you could be the next Marie Curie or Albert Einstein? Then head over to Experiment. This is an ideal crowdfunding site for businesses in the area of health, medicine, and scientific research. Experiment is a site that depends heavily on your level of expertise in your field. Their team of community scientists will review each proposal to make sure it fits Experiment’s criteria. As a reward to backers, you will share the results of your research. This usually comes in the form of peer-reviewed journals, news articles, academic posters, and the like. Experiment campaigns have a 48 % success rate.

Cons: Can be hard to qualify since scientists must approve each campaign.

Fees: 5 % cut from your funds and 3 % payment processing fee.

All-Or-Nothing or Keep What You Raise? All-or-nothing.

Best Debt Crowdfunding Sites

With debt crowdfunding, you are not just giving rewards to supporters. Instead, the backers on the crowdfunding site are giving you a loan. You are a borrower and have to pay back the loan within a specific time frame. The benefit of debt crowdfunding is that it’s typically much faster than obtaining a loan through a bank, and it’s also easier to qualify.

Below, we describe the cost for debt crowdfunding sites in terms of an APR (Annual Percentage Rate). APR is the cost of a loan over one year including fees. Having the APR of a loan makes it easy to compare multiple loan products. Unlike reward crowdfunding, which is more suitable for consumer businesses, debt crowdfunding is appropriate for B2C businesses and B2B businesses.

12. Lending Club

Why We Like It: Lending Club offers personal loans of up to $40,000. These personal loans can be used for business purposes. Lending Club also offers larger business loans of up to $300K for small business owners needing more capital. Loans are paid back in 1-5 years. The best part is how easy the process is–in most cases, you can apply for a loan and get your funds within 1 week. To qualify, you need a credit score of at least 650. For business loans, you also need to be making at least $75,000 in annual business revenues and have been operating for at least 2 years.  

Cons: Interest rates can be high if your credit score isn’t that strong.

Cost: Average APR is 9.77-35.71% for business loans and 6.16-35.89% for personal loans.

13. Funding Circle

Why We Like It: Funding Circle is a provider of crowdfunded business loans. They provide loans of up to $500K, so they are a good choice if you’re in need of more capital. They also tend to be cheaper than Lending Club and Prosper for most borrowers. To qualify, you need a credit score of at least 620, annual revenues of $150K or more, and must be in business for at least 2 years.

Cons: Can be difficult to qualify.

Cost: Average APR is 13-18 %.

14. Kickfurther

Why We Like It: Kickfurther provides crowdfunded loans for inventory financing. The name is a variation of Kickstarter–the idea is that new businesses that outgrow Kickstarter or Indiegogo will need inventory loans to keep growing. In order to be eligible for Kickfurther, you must have completed at least one successful production run. We chose Kickfurther as one of the best crowdfunding sites because of the flexibility that it offers. You can set the interest rate that you will pay to your backers and the estimated time period it will take for your inventory to sell. As your inventory sells, you pay back your backers.

Cons: Generally limited to raising about 25 % of your business’ annual revenues, unless your inventory is backed by a purchase order.

Cost: Average APR is 20-30 %. There is also a 1.5 % withdrawal fee when you withdraw funds from the platform.

15. Bolstr

Why We Like It: Bolstr provides loans of up to $500K for 2-5 year terms. They are priced about the same as Lending Club and Prosper and are also a pretty fast lender. The application process typically closes in under 7 days. About 1-6 % of your monthly sales is deducted in payment of the loan. Unlike Lending Club, Prosper, and Funding Circle, Bolstr is not a credit-score reliant lender. Instead of credit score, they look to your business’ historical revenues and profits in determining whether you’re eligible to use the platform.

Cons:  Need strong revenues to qualify.

Cost: Average APR is 8-25 %.

16. Kiva

Why We Like It: Kiva provides crowdfunded 0 % interest, no-fee loans to entrepreneurs across the US and the world. You can borrow up to $10K over 36 months. Over 2 million entrepreneurs have raised over $850 million on Kiva. To qualify for a Kiva loan, you must at a minimum be 18 years old, a US resident, and must use the loan for business purposes. You cannot currently be in foreclosure or subject to any liens. Also, you must be able to demonstrate your social capital by making a loan to another business (at least $25), and by having multiple friends and family members make a loan to you.

Cons: Limited to $10K, so you may need more capital from another source.

Cost: 0 % interest and no fees!

17. Prosper

Why We Like It: Using Prosper, you can get a personal loan of up to $35,000 which can be used for business purposes. After Lending Club, Prosper is one of the largest global crowdfunding sites. Getting a loan is fast and simple–the whole process usually takes under 1 week. To qualify, you need a credit score of at least 650.

Cons: Interest rates can be high if your credit score isn’t that strong. You are limited to $35K in capital.

Cost: Average APR is 5-30 %.

18. RealtyShares

Why We Like It: One area of crowdfunding that has heated up in the last few years is real estate crowdfunding. RealtyShares is a leading crowdfunding site that can be used to raise money for residential fix and flips or to buy commercial real estate. With RealtyShares, you can fund your real estate project in as few as 10 days. Depending on your credit and background, you may qualify for up to 90 % loan-to-value and short-term or long-term financing. RealtyShares offers both debt and equity crowdfunding.

Con: Must borrow $500K or more.

Cost: Average APR is 8-12 %.

19. Patch of Land

Why We Like It: Patch of Land is similar to RealtyShares, but they are more suitable for smaller projects. You can borrow as little as $100K on Patch of Land. You may qualify for up to 80 % loan-to-value, and loans typically close in 1-2 weeks.

Con: Can be hard to qualify, especially if you’re a first-time real estate flipper or developer.

Cost: Average APR is 8-12 %.

Best Equity Crowdfunding Sites

Rounding out our list are the best equity crowdfunding sites. When you raise money through equity crowdfunding, you must give away a portion of ownership in your company to those who provide you with funding.

20. AngelList

Why We Like It: AngelList is to equity crowdfunding what Kickstarter is to reward crowdfunding. It’s one of the oldest and most well known equity crowdfunding sites. Companies that are household names, such as Uber, Postmates, and Thumbtack, used AngelList to meet investors. Businesses based in the US or UK can apply for funding on AngelList, but the most successful companies are generally those with an experienced founding team, some post-launch revenues, or offline investors already involved with the company. The best part of AngelList is that it is completely free to use for entrepreneurs. No money actually exchanges hands on AngelList Rather, this site gives you a way to meet accredited investors and a set of online fundraising tools that you can use to create a powerful pitch and manage the investment process.

Cons: It can be hard to get noticed because of the number of businesses using the site.

Cost: Free!

21. CircleUp

Why We Like It: CircleUp has helped over 196 startups raise over $260 Million in funding. They are one of the largest sites for marketplace investing and equity crowdfunding. The average startup on CircleUp raises more than $1 million in less than 2-3 months. The companies on CircleUp are extremely innovative–we noticed businesses making everything from water bicycles to vitamin-enriched ‘smart’ coffee. CircleUp manages the closing process for you, including escrow, funding, and transfer of funds.

Con: Small mom-and-pop businesses may struggle for visibility on CircleUp.

Cost: 5 % cut from the funds your raise.

22. Crowdfunder

Why We Like It: Crowdfunder is another great equity crowdfunding site. They aim to help small businesses that would traditionally find it difficult to raise venture capital. They claim, “We get you into the deal at the same terms as leading VCs.” You can choose your company stage (e.g. seed funding, Series A, etc.), area of business, and location. Most of the deals on the site are equity deals, though there are also a few debt options.   

Con: On the costlier side.

Cost: Starts at $199/month.

23. SeedInvest

Why We Like It: SeedInvest gives small businesses and startups access to some big name investors, such as Andreessen Horowitz and Sequoia Capital, as well as smaller investors and VC firms. The company’s goal is to help businesses spend less time fundraising and more time on what they do best–running their businesses. They work with large funding rounds ranging from about $500K to $5 Million. Unfortunately, only 1 % of companies that apply for raise capital on SeedInvest actually make it through. They say that “existing traction in fundraising, particularly having a lead investor in the current round, is desired though not required to be accepted and listed on SeedInvest.”

Con: Hard to qualify and the focus is on larger funding rounds. There are also multiple fees.

Cost: 5-7.5 % fee on capital raise; 5 % warrant coverage or equity; up to $4,000 for escrow, due diligence, marketing, and legal costs.

24. EquityNet

Why We Like It: EquityNet is another old, established equity crowdfunding site. We like EquityNet because you can use it to raise smaller amounts of money, which typically isn’t possible when raising investor money. You can raise as little as $10K or as much as $10 Million on EquityNet. EquityNet also has a patented business plan and analysis software that you can use with a paid subscription to your best foot forward with investors. According to Equitynet, Entrepreneurs who use their business planning software are 10 times more likely to obtain funding than those who don’t.

Con: Most features require a paid subscription.

Cost: $600 for 3 months.

25. RealtyMogul

Why We Like It: Just like real estate crowdfunding is popular on the debt side, equity crowdfunding for real estate is picking up steam as well. RealtyMogul is one of the largest equity crowdfunding sites. There over 28,000 investors willing to fund a range of projects, from single family residential fix and flips to office buildings to commercial properties. The timeline for raising funds ranges from about 30-45 days, and funds may cover up to 90 % of your costs.

Con: Focuses primarily on large real estate deals starting at $1 Million.

Cost: Not provided.

Over to You

Which of these best crowdfunding sites is your favorite? Do you have a favorite that we didn’t cover? Let us know in the comments below!