How to Build a Successful Crowdfunding platform
What is a crowdfunding platform?
Crowdfunding through an online platform has been one of the main topics discussed in the business space for the past few years. It is one of the strongest tools for generating capital for a startup or growing an already existing business. Fresh crowdfunding platforms are on the rise; should you create one? If you are considering sourcing funds for a new project, idea, or business, Crowdfunding is the way to go. How do you build a successful one? This article provides a detailed step to get started.
Learn about Crowdfunding market opportunities
What is White Label Crowdfunding
A crowdfunding platform is a website that links a fundraiser and donors together, enabling seamless interaction between them. Pledges can be made and collected through the platform.
If a fundraising campaign is successful, fundraisers are charged a fee while the platforms offer a safe and secure service. Several platforms use the all-or-nothing model. Here is what it means – if you (as a fundraiser) reach your target, you’ll get the money. However, if you don’t reach your target, the funds are returned to their owners.
What are the main types of crowdfunding?
If you are building a successful crowdfunding platform, you should know the various types of crowdfunding. Here they are:
- Peer-to-peer lending: In this type of crowdfunding, people give money to a startup or to an existing business with the expectation that they will be repaid with interest. It is just like borrowing from a commercial bank. The only difference is that you borrow from several investors at a time instead of a bank.
- Equity crowdfunding: As the name implies, this refers to the sale of a stake in a business to several investors. The type of crowdfunding works like the stock market, where stock is bought or sold on a stock exchange.
- Rewards-based crowdfunding: This type of crowdfunding involves Individuals donating to a business or project with an expectation of receiving a non-financial reward. The reward could be in the form of goods or services, and they do not come immediately but after a while.
- Donation-based crowdfunding: Unlike the other types of crowdfunding projects, individuals give little sums of money without expecting any form of compensation. The aim of this kind of crowdfunding is for charitable projects.
- Profit-sharing / revenue-sharing: This type of crowdfunding involves several individuals funding a business or a project; then they share profits.
- Hybrid models: This kind of crowdfunding allows businesses to combine more than one type of crowdfunding.
How can you Build a Successful Crowdfunding Platform?
The rise in technology today has made it easier to create a Crowdfunding website quickly. Here is a step by step guide on how to build one:
Find a specific Crowdfunding niche
Every new Crowdfunding platform must be designed for a niche. What this means is that the platform will only host campaigns for a specific cause or line of products. Although some bigger platforms are designed for several niches, you shouldn’t compete with them. While starting out, stay with one particular niche that isn’t yet common in the Crowdfunding industry. Not only will this give you an edge over others, but it will also provide more value to your campaign creators.
Search for the right Crowdfunding technology
What features do you want on the platform? List them out. You need technology that fits your needs. Also, when it comes to building a successful Crowdfunding platform, you need to ensure that you use a technology where users will get the best experience. You can opt for a SaaS (Software as a Service) product that provides premium support. When you do this, you’ll have little issues to fix. Furthermore, go for a product that gives you access to the front-end source code. This will enable you to manipulate the User Interface (UI) to fit your needs. Otherwise, you will be restricted. Also, if you have access to the front-end code, you can hire a developer anytime you have issues with manipulating the default UI.
Connect the payment gateway
Most Crowdfunding platforms, you know, take a transaction fee for every donation to crowdfunding campaigns on site. You can open a new bank account for your new Crowdfunding platform if you’d like to take a transaction fee also. This is a perfect way of generating a passive income. To get started, set up a bank account and connect it to the payment gateway to be able to receive transaction fees. A common and secure payment gateway to use for your Crowdfunding platform is Stripe. It is available in several countries and regions. It also has low transaction fees.
Also read: How to Choose a Payment Gateway for Crowdfunding Software
Add the content
Now that you have chosen the niche, technology to use, and connected the payment gateway. The next thing to do is to add content to your platform. The best thing to do is to create all of the content, prepare all images and videos before adding the content to the site. This will save you a lot of time.
Launch the platform
Once you have set up the platform, it’s time to launch it. However, before you do, it is better to have your crowdfunding campaigns ready to kick off on your platform before you launch. If you are wondering where to get campaigns, you can start by involving friends and family. Your first campaigns may be from them. You may also join online communities on social media. It is also advisable to create a pre-launch campaign before kicking off. This will help you to generate a good number of followers before you finally launch your platform.
Market the platform
Now you have your crowdfunding platform launched on the internet. The next and final step is to market the platform to the world. There is no end to this step. You keep marketing it so that many campaign creators can approach you to create campaigns on your platform. When this happens, you earn some money by the side too.
Crowdfunding has made funds easier for everyone to access. Without it, several businesses, ventures, and projects may have died without any help. We have looked into what it takes to build a successful crowdfunding platform. Hopefully, you can create a successful platform and start generating funds for businesses