Our Selection of the Best Crowdfunding Site
Our Rating of The Best Crowdfunding Site (research published in May 2012 changes may have occurred since the date of posting)
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Crowdfunding as defined by Wikipedia “describes the collective cooperation, attention and trust by people who network and pool their money and other resources together, usually via the internet, to support efforts initiated by other people or organizations. Crowd funding occurs for any variety of purposes from disaster relief to citizen journalism to artists seeking support from fans, to political campaigns, to funding a startup company, movie or small business or creating free software.
Another aspect of crowd funding is tied into the United States of America JOBS Act, which allows for a wider pool of smaller investors with fewer restrictions. President Obama signed the Act on April 5, 2012. The U.S. Securities and Exchange Commission is going to have approximately 270 days from the enactment date to set forth specific rules and methods to ensure that funding will actually take place.” As such, the law will come into effect around January 5, 2013.
Purpose of the Research Project
This research report aims to compare the various crowdfunding websites that are looking to emerge as the market leaders in the industry and identify which crowdfunding sites we consider to have successfully emerged as the leaders, the trendsetters and the benchmark for the industry.
Our analysis identified, base level costs charged by the sites, the approximate number of campaigns (ranging from low to beyond impressive numbers), the user-friendliness of the site, including but not limited to, the ease of finding campaigns and the types of searches that can be used to filter the funding campaigns and the amount of traction that the site currently has in the market place identified by a variety of different factors resulting in the rating we gave it (the top position being the benchmark for the industry). Additionally, our analysis identified the purpose of the site and looked at whether offering equity would play a key role in determining the success of the site. The result for the later completely shocked us!
Follow Up Report
After performing our evaluation, in a follow-up to this report, we also identified the strengths, the weaknesses, the opportunities and the threats to the current market leaders and where opportunities for new crowdfunding platforms lie. The results identified for us where we felt new sites should focus and how they should position themselves to challenge and even overtake the current market leaders.
Included in our results, first, we identify our overall ratings of the top crowdfunding websites for our needs . Then we identified the top crowdfunding website by industry (purpose) where, at times, the market leading crowdfunding site was better than any niche market site for our needs (see footnote 1). Then we went on to compare the new crowdfunding opportunities where equity exchanges are allowed and compare them to the current crowdfunding sites that do not allow equity exchanges. In this case, we also looked at whether the new equity based crowdfunding sites will pose a threat to the current non-equity based crowdfunding sites with astonishing results. In all cases, one emerging market leader was identified for our needs– www.KICKSTARTER.com. (See footnote 1).
As can be seen in our diagrams above, for our purposes, KICKSTARTER is the benchmark for the industry because of the traction that it currently has with the crowd, which far surpasses any other site that we looked at. However, with www.indiegogo.com allowing campaigns to keep any of the money they receive as donations, unlike kickstarter, Indiegogo is starting to make inroads into the industry. We predict that unless kickstarter changes it’s all-or-none policy, more users will eventually move to indiegogo.com if that remains the only differing factor between the two leaders.
Additionally, when we compared the crowdfunding websites that allowed equity exchanges to the non-equity based crowdfunding websites that were based on more creative rewards, we found that although the equity based crowdfunding platforms were not currently as developed as the non-equity based crowdfunding sites (most are still in beta testing see our site www.crowdfundingeducators.org under emerging websites for our top three equity exchange crowdfunding sites.), there was a different and viable market for these websites that would only add options for small businesses to grow. Moreover, although we would most often suggest that companies first use the more developed non-equity based crowdfunding websites, there were instances when it made sense to use the equity based crowdfunding websites.
Originally, the key question we had was, “if companies can’t pre-sell their products on non-equity based crowdfunding sites successfully, why should investors want to get involved?” However, we realized quickly that there are different reasons why investors want to invest in equity instead of pre-purchasing products; and, not all companies are able to pre-sell their products, which led us to believe that there could be two completely different market streams. However, we did manage to determine one clear unequivocal reality for the equity based crowdfunding websites. They are considerably behind the current non-equity based crowdfunding websites, which from a small businesses perspective looking for financing is fantastic because it gives them more and better options.
The list of crowdfunding websites we reviewed is listed in the sidebar of our site www.crowdfundingeducators.org (some 78 sites in total) and all of these sites were fantastic . However, the sites listed above in our summary charts fit our purposes best (going from top to bottom). And, if you’re not using www.kickstarter.com to fund your campaign, we believe you should be. However, KICKSTARTER did have its drawbacks and there was definitely room for new crowdfunding sites to compete. We’ll be following up with a more detailed look at equity based crowdfunding sites compared to our benchmark as they get out of beta . Be sure to watch for our report on how to overcome the industry benchmark, which will identify the strengths, weaknesses, opportunities and threats of these sites.
1. Our rating of these crowdfunding sites is our opinion and applicable for our own purposes and may be different for every user depending on what is most important to each individual or organization.
2. Although, we currently are not receiving payments in any form (donations, sponsorship or advertising) from kickstarter or any other of these sites, we cannot claim independence, as we are open to receiving donations, sponsorships or advertising funds from any of these sites. However, in no way did this affect our analysis and although we cannot claim independence we will continue to hold ourselves to the highest standards.
3. If your crowdfunding website was not listed in our side bar of crowdfunding websites, please contact us at firstname.lastname@example.org
4. If your equity based crowdfunding site is currently out of beta testing, please contact us at email@example.com and we will include your site in our follow-up review and add a correction to our current report.