6 Best Crowdfunding Platforms To Kickstart Your Business

Crowdfunding might just be the thing you need to turn your business idea into reality.

Raising business capital is never an easy or straightforward task regardless of how entrepreneurial one may be. Here’s where crowdfunding can make all the difference even if you, as a budding entrepreneur, have barely any capital on hand. 

What exactly is crowdfunding? Well, as its name may suggest, the crowd funds your business venture: you put your business idea out there and pitch to the masses. 

Those who buy into your idea then contribute small amounts that go toward your seed capital. Besides letting you raise funds through donations, pre-orders or even investments, crowdfunding is a great way for entrepreneurs to eyeball the demand for their ideas before they go into actual production. 

Types of crowdfunding available 

• Donation-based crowdfunding: individuals pool their resources to support a charitable cause
• Reward-based crowdfunding: individuals contributes funds in return for a ‘reward’, typically a product produced by the company
• Lending-based crowdfunding: individuals lend money to a company and receive the company’s legally- binding commitment to repay the loan at the predetermined interest rate and time intervals
• Equity-based crowdfunding: individuals invest in shares sold by a company and receive a share of the profits in the form of a dividend or distribution, subject to the company’s discretion

Crowdfunding regulations in Singapore

The Monetary Authority of Singapore (MAS) regulates lending-based crowdfunding as well as equity-based crowdfunding under the Securities and Futures Act. This is why certain crowdfunding platforms are regulated while others are not.

#1 Kickstarter

Have utter confidence in your idea? Kickstarter is one big name in the game not to be missed. Essentially the big daddy of rewards-based crowdfunding, Kickstarter has launched more projects that you can count. This includes anything and everything from films and games to technology and creative projects. The Travel Tripod, Coolest Cooler, Exploding Kittens card game and Fidget Cube are some of the exceedingly popular and successful projects that have been brought to life thanks to Kickstarter.  

Keep in mind that funding on Kickstarter is all-or-nothing: your backers will not be charged until your campaign reaches its goal. A fee amounting to 5% of the total amount raised is applicable.

#2 Indiegogo

Another incredibly popular crowdfunding platform is Indiegogo, Kickstarter’s biggest rival to date. This crowdfunding platform offers greater flexibility for those looking to raise funds for their projects, although higher fees are part of the equation. Indiegogo lets you choose between its all-or-nothing option or keep-what-you’ve-raised option. 

While the keep-what-you’ve-raised option sounds fantastic, bear in mind you have to see your project through to completion regardless of how much or how little you’ve raised at the end of your campaign. Indiegogo is particularly popular with those looking to launch projects in the fields of technology or creative works.

#3 Patreon

Patreon is hands down the most unique platform out there for creators and artists, including YouTubers, bloggers, podcasters, cartoonists, live streamers, musicians and more. 

How does Patreon work? Patrons who would like to support their favourite creators and internet personalities can pay ‘per month’ or ‘per creation’ to incentivise them to create more and better content. In exchange, creators offer all sorts of exclusive perks that their supporters can enjoy based on the payment tier they’ve subscribed to. Exclusive perks can include things like access to exclusive content, sneak peeks, shoutouts, branded swag and more.

If you regularly create content and you have a growing online presence, it might be worth creating a Patreon page to boost the recurring revenue you get from doing what you do! 

Three types of plans are available and Patreon takes a small cut once you start earning via the platform. Take note payment processing fees apply.

#4 Crowdfunder App — Shopify

Already have a store on Shopify? You can crowdfund right in the comfort of your own store and have complete control over the entire process from start to finish. This would work regardless of whether you are looking to launch limited edition versions of your best-selling products, test new product ideas, offer pre-orders as a way to gauge the demand for your products, or even raise funds for special causes close to your heart. A monthly fee to use the Crowdfunder App — Shopify applies. 

#5 FundedHere

FundedHere is Singapore’s true equity crowdfunding platform, so expect MAS regulations to kick in as you utilise the platform to fund and grow your new-ish but promising startup. You can choose equity or loan as your preferred funding option. 

Here are the three main requirements you need to fulfil in order to use FundedHere to match your startup with potential investors:  

• Your startup must be a Singapore-incorporated entity that’s been in operation for at least 3 months
• Your startup must have a a paid-up capital of at least $50,000
• One of the founders of beneficial owners of your startup must be Singaporean 

Of course, MAS-licensed FundedHere charges a success fee made up of cash and shares at the same valuation. There’s also a minimum investment amount of $5,000 per investor, for up to 12 months. In return, investors will receive equity in the company or semi-annual interest payments. 

#6 Funding Societies

Funding Societies allow small businesses to tap into peer-to-peer (P2P) lending. As the biggest and most well-funded P2P lending platform in the Southeast Asia region, Funding Societies lets SMEs crowdfund an array of business loans right in the heart of Singapore. Some examples include business term loans and invoice financing. 

In exchange, they’ll have to pay their investors interest on their loans. Just a heads up, SMEs with good credit rating can expect to secure business loans ranging from $5,000 to $1.5 million through Funding Societies.

Conclusion

Starting a company is never easy and so is the task of raising business capital. If you are a budding entrepreneur who’s determined to start growing your business, definitely check out these sources of capital for business owners — we’ve rounded them up conveniently for your easy reference.

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