Comparison of the Best Crowdfunding Platforms for VSEs – SMEs [2020]
If you have an entrepreneurial project and are looking for financing to carry it out, crowdfunding is a solution to consider. The problem, if we can talk about a problem, is that today there are dozens if not hundreds of crowdfunding platforms in united state alone. And to add to the complexity, the financing methods proposed are varied: equity participation, donations with counterparts, loans (this is called crowdlending). In short, it’s not easy to find your way in this crowdfunding jungle.
We’ve designed this comparison of crowdfunding platforms to help you see more clearly and find the platform best suited to your needs. We have selected 10 platforms, some of which are specifically designed to finance VSEs and SMEs as we will see.
The 3 families of crowdfunding platforms
Just as there are many types of fundraising for businesses at all stages of growth, there are a variety of types of equity financing. The method of crowdfunding chosen by an entrepreneur depends on the type of product or service they are offering and their growth objectives.
The 3 main forms of crowdfunding are grant, loan, and equity financing.
Donation financing
This is any participatory fundraising campaign in which there is no financial return for investors or contributors. Funders generally invest for a charitable, social or solidarity work. On the other hand, the project leader receives donations, treats them as turnover and must declare this income according to the terms set by his status (individual, company, auto-entrepreneur…). In this example, we can cite platforms such as Ulule and Kickstarter.
Loan financing
Also known as “crowdlending”, this model allows project creators to obtain financing from individuals through a loan. Crowdfunding by loan is aimed at individuals to finance health or education expenses, for example, as well as companies (VSEs, SMEs) with a solid balance sheet. This family includes WeShareBonds or Lendopolis.
Capital financing
This model allows investors to participate directly in the capital of projects. This allows contributors to become co-owners of a company by exchanging capital for shares. The entry ticket is relatively low compared to the standards practiced in the private equity community. The most well-known platforms here are Wiseed and Happy Capital.
Our selection of the top 9 crowdfunding platforms in 2020
Ulule
Type of funding: Donation funding
Founded in 2010 and based in Paris (with additional offices in Rome, Barcelona, Brussels and Montreal), Ulule differentiates itself from the crowdfunding crowd by focusing on personalized coaching. Ulule provides this support before, during, and after your participatory fundraising campaign. This contributes to what Ulule claims to be the highest rate of successful campaigns in the participatory fundraising industry, currently at 65%.
Pros and Cos
The “+” :
- Good business support for entrepreneurs
- With a high success rate
The “-” :
- Campaigns require prior approval
- Fees too complicated
- Unable to raise funds if you don’t reach your fundraising goal
Rates
- 6.67% of all funds received by credit card, 4.17% of funds received by cheque or PayPal
Kickstarter
Type of funding: Donation funding
Kickstarter is designed to finance creative projects. But don’t worry if you don’t mention artist or musician on your tax forms. Remember that guy who accidentally raised over $50,000 to make potato salad? That was on Kickstarter.
It’s an all-or-nothing platform, which means that if you don’t reach your fundraising goal, you won’t get the money you’ve raised. Your donors won’t have to pay for your project, which could make the donation more attractive.
Pros and Cos
The “+” :
Name recognition means you will have more visibility.
You benefit from a discount on small donations.
The “-“:
- The project must match Kickstarter’s categories and requirements.
- The platform limits the types of projects you can fund.
- Projects are limited to 30 and 60 days.
Rates
- 5% platform fee
- 3% plus $0.20 payment fee for ads over $10
- 5% plus $0.05 for pledges of less than $10
Wiseed
Type of financing: Capital financing
Wiseed creates innovative investment opportunities by leveraging the collective intelligence of a 70,000 strong investment community. Launched as the world’s first equity financing platform in 2008, Wiseed literally allows anyone to invest in sectors such as biotechnology, clean technology, digital, industrial or real estate – assets that have long been accessible only to an elite group. Wiseed, available in multilanguage, is licensed and regulated as an ISP (Investment Service Provider) by the American Autorité de Contrôle Prudentiel et de Résolution (ACPR).
Pros and Cos
The “+” :
- One of the most complete platforms (Real Estate, ENR, CrowdFunding Equity, ..)
- High rates (around 10%) over short terms (12 to 24 months)
- Possibility to invest from 100dollar while other real estate platforms generally impose 1000 dollar.
The “-” :
- Projects closed too quickly, requiring to be present at a fixed time and to integrate a queue (the ransom of success?).
- Too long loan path (although recently improved) and very difficult to achieve from a cell phone.
Rates
Wiseed charges a fee of 0.9% of the amounts invested and between 4% and 10% of the funds raised.
Indiegogo
Type of financing: Capital financing
Indiegogo is the largest participatory financing company dedicated to entrepreneurs. It has raised more than $1 billion for design, technology and innovation projects since it began operations in 2008. It also provides assistance every step of the way, from concept to marketing.
This platform enables two types of crowdfunding: actions, which allow startups to seek investors, and rewards.
Pros and Cos
The “+” :
- Focused on creative services, marketing and Com, prototyping, production, retail, licensing and distribution.
- Reduced fees for charitable campaigns.
The “-” :
- Campaigns are limited to 60 days.
- You must provide rewards, even if you do not receive full funding.
Fees
- 5% platform fee
- 3% plus $0.30 processing fee per donation
- 25 transfer fee for non-bank payments
Crowdfunder
Type of financing: Capital financing
Crowdfunder is a platform for participatory equity financing that focuses on connecting entrepreneurs and investors. With more than 12,000 angel and venture capitalists in its network, it has funded over 100 unique projects with an average transaction size of $1.8 million. He contributes to startups at all stages and has fundraising coaches to share industry knowledge and help you optimize your pitch.
Pros and Cos
The “+” :
- Can benefit from fundraising at all stages.
- Easy for investors to browse niche companies.
The “-“:
- High monthly fees may deter new businesses.
- No access to small investors.
Fees
449 to $499 monthly membership fee
Crowd Supply
Type of funding: Donation funding
Launched in 2012 with product designers in mind. Although it shares some of the elements of Kickstarter, this Portland-based platform is essentially a pre-order store. Instead of donating to a campaign for a reward, supporters pre-order a product that needs funding to support its manufacture.
Pros and Cos
The “+” :
- Expert advice with review and campaign management.
- Once your campaign is complete, you can sell your product on the platform.
The “-” :
- Potential for high fees.
- Small community of support.
Pricing
- Platform fees from 5% to 15% of your objective
- 2.9% plus $0.30 fee per donation
GoFundMe
Type of funding: Donation funding
GoFundMe is an internationally recognized platform to help people around the world invest their money in charities and causes that matter to them.
Pros and Cons
The “+” :
- Focus on charitable causes
- Keep What You Earn” Funding Model
The “-” :
- Few options for traditional startups
- A low success rate for full campaign funding
Rates
0% for personal campaigns in the United States; 5% for charities and countries outside the United States.
Peerbackers
Type of Funding: Reward Funding
Peerbackers helps users raise funds for campaigns through donations in exchange for rewards. All the money you collect is yours as long as you reach at least 80% of your goal.
Pros and Cos
The “+” :
- User-friendly site and more customizable than other platforms.
- Customer service is fast and reliable.
The ” – ” :
Does not rank high in search engine results.
Rates
- 5% platform fee
- 2.9% processing fee
Fundable
Type of funding: Donation funding
Designed to help small businesses meet a variety of fundraising goals, Fundable offers donors rewards or equity for every donation. Rewards help campaigns reach a broader donor audience, but you will generally raise less than you could with a corporate fundraiser.
Pros and Cos
The “+” :
Supports donors of all sizes.
Gifts of stock come free of charge.
The “-“:
Does not support non-profit organizations and a handful of industries.
Rates
- 179 in monthly user fees
- 3.5% plus $0.30 per credit card transaction for donation-based campaigns
Conclusion
With the emergence of more and more crowdfunding platforms, there can be a lot to browse through to find the right one for your business. The 10 platforms listed here should give you a good overview of your main options. Be sure to consider the fees charged before you launch a campaign to avoid surprises once the money starts to flow.
