The crowdfunding concept is starting to draw a crowd. Startups built on a version of the Kickstarter model are now popping up all over the place, in sectors from gaming to health to education.
They tend to come in one of two flavors. The first is crowdfunding platforms that help fund a wide variety of one-time projects through donations, loans or pledges in exchange for rewards. These platforms are more about pledging support for an idea, project or person than investing in a product or company.
Meanwhile, the JOBS Act has given rise to a second flavor of crowdfunding, sometimes called crowdinvesting. The act, which when it goes into effect will loosen the regulations on fundraising for companies, is spawning new funding platforms designed to help more people get into the investing game by allowing them to take a piece of equity.
There are now scores of startups offering to connect people and their product ideas with funding sources and potential customers. Is this gold rush an ominous sign? Will crowdfunding be the next daily deals bubble? Probably not. Crowdfunding works through interested investors or enthusiastic supporters, which seems more sustainable than merchants providing steep discounts to get customers in the door.
But crowdfunding still has some issues to work out, like what happens to the funding when entrepreneurs are not able to complete the project the money was supposed to bankroll? And for equity investors, it’s still not clear what limitations there will be on investing and what disclosure and anti-fraud measures will be required.
Here’s a snapshot of the fast-growing crowdfunding landscape, with its various offshoots. If there are any companies that we missed, please drop us a note in the comments.
General crowdfunding platforms
Kickstarter: The big name in crowdfunding, it has raised more than $360 million dollars for more than 32,000 successful projects to date. Kickstarter started out supporting creative projects but now gets much of its pledge dollars for technology and design projects.
Indiegogo: One of the main Kickstarter rivals, Indiegogo allows more flexible payment options and allows creators to keep their funds even if they don’t hit their goals.
Rally.org: Rally emphasizes story telling in helping raise funds for campaigns. Rally has no time limits and no tipping point for funding.
RocketHub: Encourages creative projects from anywhere around the world. It allows creators to keep what they raise but also get bonuses for exceeding their goals.
GoFundMe: Billed as a crowd-funding site for the rest of us, GoFundMe is supposed to help with any kind of projects or needs. Creators also get paid as the money comes in.
CrowdTilt: Works for friends who want to pool their money together for an event, fundraiser or objective. The funders are only charged when the goal is met.
FundRazr: Allows people to raise money for a personal, group, political or non-profit cause.
Crowdfunding for social causes
Causes: Designed for social do-gooders who want to bring about change, Causes said more than 170 million people have participated in a campaign.
Razoo: Razoo works to raise money for causes on behalf of 501(c)(3) non-profits. An individual or team can start a campaign to benefit a non-profit or the non-profit can do it themselves.
StartSomeGood: StartSomeGood tries to help social entrepreneurs address causes around the world by getting support from their peers. It works for non-profit and for profit organizations.
Crowdrise: Helps people and teams support charities by setting up fundraising campaigns. Supporters can donate money or also volunteer for a cause.
CauseVox: Is aimed at helping small to medium sized non-profits create their own fund-raising sites.
Kiva: Less of a crowd-funding service and more of a micro-loan platform, Kiva allows people to help extend a small loan to borrowers around the world.
Crowdfunding for health and medical
Health Tech Hatch: Creates a tool for health care entrepreneurs to get funding for their company or product. In addition to funding, HTH also tries to provide entrepreneurs with a way to get prototype testing and expert feedback.
Medstartr: Is designed to help health care startups, products and ideas get off the ground. It could be a medical device, research project, application or a drug in clinical testing or it could just be a medical practice that needs money to get underway.
Crowdfunding for small and local businesses
Lucky Ant: Helps a local businesses raise funds for projects like a remodel. The service is focused primarily on New York and Philadelphia but also has projects elsewhere.
Smallknot: Works with small business owners that want to grow and helps them raise funds from supporters and customers. Most campaigns are run currently in New York.
Peerbackers: For entrepreneuers and small business owners, it gives them a way to raise money from their peers in exchange for rewards.
Bolstr: Bolstr allows small businesses to get support from friends, family and community members and offers them a share of revenues over a fixed period of time in exchange for their investment.
Crowdfunding for science
Petridish.org: Allows backers to support renowned scientists, who need money for projects and expeditions. Petridish currently works with researchers in biology, astronomy, technology, social science, medicine and other fields who are affiliated with universities, nonprofits, or other research institution.
Microryza: Created by University of Washington researchers, Microryza tries to link scientists and researchers with supporters, who want to back interesting science projects.
iAMScientist: Is designed to fill the gap in funding for smaller, well defined-research projects that don’t get considered for big grants.
Crowdfunding for music
PledgeMusic: Allows musicians to go directly to their fans for support in launching a new album, tour or other project. In exchange for pledges, musicians provide signed or limited edition items or exclusive experiences.
Ziibra: Allows fans to support an album from an artist. The more people who pledge to buy an album, the lower the price is for everyone, which encourages viral sharing.
Sellaband: Artists and bands can raise money for recordings, albums, tours or marketing campaigns directly from fans. In some cases, the artist may allow fans to get a cut of the revenue from their project.
Crowdfunding for education
Created by Prototyped at the University of Delaware, Useed allows students, faculty, and alumni to get funding for their higher education projects. The service can be branded for each institution and can be tied directly to the school’s gift processing system and donor database.
Smartn.me: Is designed primarily to help fund education for students. But it’s not just for college students, it can be anyone trying to pursue an education. Teachers can also raise money for projects on Smartn.me.
Crowdfunding for gaming and apps
Gambitious: Helps independent game developers get up to £.2.5 million in funding for their gaming projects. Developers can offer perks to all supporters or equity in their game in exchange to European funders.
Appsplit: Allows developers to get funding for their app or app idea. Supporters can get rewards or shares of the product. Appsplit also works as a marketplace for people to buy the entire ownership of the app.
Appbackr: Developers can sell a designated number of copies of their app to a backr, who gets a share of proceeds when the app sells. This allows developers to get money up front, which they can invest in marketing or other needs.
AppStori: Lets developers gain funding and feedback and create a story around an app before it launches. It allows supporters to help shape the development of an app.
Crowdfunding for startups and companies
Funders Club: Allows accredited investors to get access to pre-screened companies. They can invest for as little as $1,000. Is exploring the opportunities to offer access to more investors with the JOBS Act.
CircleUp: Lets accredited investors invest in private consumer product companies with more than $1 million annual revenue. Investors get preferred shares of a company. Plans to open up to more businesses and investors when the JOBS Act is implemented.
WeFunder: Helps investors buy stock in new businesses for as little as $100. Entrepreneurs can put off VC funding and get supporters to help tell their story.
Angel List: Right now, Angel list connects startups with investors and entrepreneurs. No money changes hands through Angel List. But with the JOBS Act in place, Angel List will be able to help companies raise money from more investors.
Fundable: Helps startups raise money for their products in exchange for rewards. It will shift to equity investments when the JOBS Act rules are implemented.
Crowdfunder: Is open for contribution funding now but will get into equity investments soon. Investors will be able to get a share of the company or a cut of revenues.
Microventures: A peer-to-peer lending service that allows accredited investors to invest in startups. Still not clear if they will open up to more investors with the JOBS Act.
CrowdCube: A UK-based funding platform, it allows entrepreneurs to raise money from funders in exchange for equity. Investors must meet some minimum requirements such as making £100,000 in the last year.
Equitynet: Uses analytics, business benchmarking, and standardization to optimize the fundraising process for entrepreneurs and investors. Entrepreneurs pay a monthly fee for business planning software, assistance and access to VCs and angel groups.
EarlyShares: Will launch when the JOBS Act is in place. Investors will be able to back small businesses and early-stage companies in exchange for equity.
SeedInvest: Will bring together entrepreneurs and investors, who will be able to take a piece of equity in exchange for investing in a startup.