“Keep up the good work, and I think you might have a shot at Beard Team USA.”
With that simple email, thus began my entry into the world of competitive facial hair competition. It was 2007, my first year out of college, and for a lark I had grown a moustache that was sprouting sides. I had never heard of Beard Team USA before, and I had no prior knowledge of the World Beard and Moustache Championships which were set to take place in Brighton, England just three and a half weeks later. I had no money and no passport, just a sudden urge for an adventure. At the encouragement of several friends, I set up a blog, emailed a long list of contacts, and started soliciting donations to fund my trip. A few days later I had close to $1000 in pledges and a reserved seat on a plane to Heathrow.
I was shocked at the success of my fundraising, but there I was having successfully crowdfunded my way overseas before I had ever heard the word crowdfunding. Now of course there are a number of sophisticated platforms to help you raise money for a variety of different endeavors. This recent New York Times article, “Crowdfunding Tips for Turning Inspiration Into Reality,” provides valuable insights to help your campaign be successful, but at the end I was stuck with one burning question: how does one choose which crowdfunding platform is best?
No doubt you’ve heard of Kickstarter, the original and still crown jewel of the crowdfunding scene. However, even with its unquestioned name-recognition, it is far from the only player in town. It wasn’t clear to me why someone might pick one service over the other, so I did some research on the four major platforms mentioned in the Times article to help you understand the subtle differences between the offerings. I hope the next time you have a crowdfunding opportunity, this will help you choose the best platform for your campaign.
What follows is an in depth look at the defining features of four crowdfunding platforms: Kickstarter, Indiegogo, RocketHub, and Crowdtilt. There are of course more options out there to explore, but this should help you gain an understanding of the major players in the space.
* All or nothing funding. In other words, you only receive the funds you raise if you reach the goal you have set for your campaign. If you aim to raise $20,000 but only end up with $19,999 in pledges when your campaign ends, you end up with zilch and your backers never get charged for their pledge.
* Projects only. Its area of emphasis is “creative projects” in the areas of art, comics, dance, design, fashion, film & video, food, games, music, photography, publishing, technology, and theatre. Projects must have a clear goal, and clear date of completion, and something that is produced. If it doesn’t, it’s not a project, and Kickstarter will not support it. Full guidelines are here.
* Staff Picks. Kickstarter editors examine and approve all campaigns before they begin. When they see a campaign they find particularly compelling, they make the project a Staff Pick, bringing it added exposure on the site. This opportunity could mean significant returns for a campaign if selected.
* 5%. Percentage of funds paid to Kickstarter if and only if the campaign is successfully funded. There is also an additional 3-5% taken for payment processing fees.
* Somewhat international. Projects can be started by anyone 18 or older, but only if they live in the US, UK, Canada, Australia, or New Zealand.
* Funding options. Fixed Funding is an all or nothing proposition, just like Kickstarter, and comes with a 4% fee paid to Indiegogo if the campaign is successful. They also offer Flexible Funding where you can keep what you raise even if you don’t hit your goal. If the goal is not reached, a 9% fee is applied to funds raised; if the goal is met, then the same 4% fee applies as it does with Fixed Funding.
* Highly international. Campaigns can be created by anyone, anywhere, with a valid bank account. The only exceptions are for the few countries listed on the U.S. OFAC Sanctions List.
* Fund anything. There are no limitations on what you can raise money for on this platform. It could be a creative project, getting a business off the ground, or help with medical bills. If you need money for something, you can get it on Indiegogo.
* Analytics and social media. Indiegogo features one-click social media integration into your campaigns and comes with comprehensive analytics tools and dashboard so you know exactly where your traffic and conversions are coming from. Powered by Google Analytics.
* Featured campaigns. Unlike Kickstarter which uses editor selections, Indiegogo uses a unique algorithm called the gogofactor to determine which campaigns get featured across its channels (site, blog, newsletter, etc.). This creates a merit-based platform where you earn featured visibility by having active campaigns.
* Keep your funds, no matter what. Similar to Indiegogo, RocketHub offers differing fees depending on if the goal is reached (4% if it is, 8% if it is not), but it removes the need to choose a funding option before beginning. Just set up your campaign, start fundraising, and you’ll automatically keep what you raise (minus fees) regardless of hitting your goal.
* Community focused. Their area of emphasis is art, science, business, and social good projects, but the only exclusions include equity, revenue sharing, investment opportunities, and lotteries/raffles/sweepstakes.
* Open to all. There are no barriers to who can start a project, or from where. It simply needs to be “legal and in good taste.”
* A&E Project Startup. RocketHub has partnered with A&E Project Startup to feature select campaigns on the reality TV show, which could bring millions of additional eyeballs to your project. The A&E teams reviews RocketHub projects daily to find particularly compelling and passionate campaigns. In addition to the TV show, selected campaigns also get featured online and in A&E’s magazine.
* Group focused. Crowdtilt was founded as a group-funding platform that allows groups of individuals to pool funds together in advancement of an objective or interest in which all funders will benefit (though it can be used to support individual endeavors). This might involve collecting funds for a group outing to a baseball game, a large gift for a friend, vacations, or a local non-profit. It’s focus is to help fund endeavors that your social network is passionate about as a group.
* All or nothing funding. Just like Kickstarter, if you don’t meet your goal (they call it “tilting”), you don’t see a dime. Unlike Kickstarter, the fee if funded is only 2.5%, with contributors paying an additional 2.5% credit card processing fee on their own pledges.
* US only. “Pretty much anyone from anywhere” can help fund a project, but if you’re trying to start one, you have to be a US resident with a valid US bank account.
* Quick payment. Because their payment method is direct deposit, it usually only takes one business day for you to see funds in your account after your campaign tilts.
* Facebook required (except for non-profit campaigns). The administrator of a campaign must link the campaign to their Facebook profile, so if you don’t have one of those, you might be out of luck.
So, you need some money, and you need some help in getting it: which platform should you choose? As you can see above, it all comes down to what exactly your funding, where you’re funding it from, and what type of visibility you hope to get. For example, would your project benefit from any amount of money you could raise, or would receiving significantly less than your goal just saddle you with unrealistic expectations to deliver a product without the necessary funding? This question might help you decide which platform, and corresponding funding model, might be best for you. It’s one of many you should ask yourself when deciding where to launch your campaign.
For reference, I’ve included a detailed chart comparing a number of the different variables involved with each site, below. I hope you find this to be a useful tool when evaluating your options, in addition to the more detailed features discussed above.
So, what do you want to fund today?