Whenever we talk about crowdfunding for startups, the very first name that comes into our mind is Kickstarter. Kickstarter is a very popular online platform for funding your products so that they can be launched. As so it happens that Kickstarter does have some cons. Those cons aren’t too big of a deal but can put you in a tight corner. That may even cause your crowdfunding to fail. That’s why people turn to alternative means of Kickstarter. But the alternatives aren’t free of faults either. So, you need to choose carefully. We are here to help you with that. In this article, we will discuss the top 10 things that you should know for all Kickstarter alternatives.
Top 10 Things to Know for Kickstarter Alternative
There are lots of Kickstarter alternatives on the internet. The popular demand for crowdfunding had brought them to existence. All have their unique offerings and niche for crowdfunding. Those are what make them different from each other. But some other things had to be bright under our consideration. Such as the commissions, transaction fees, approval process, etc.
- Crowdfunding campaign deadline
Usually, all crowdfunding platforms including Kickstarter have a deadline for all projects/ campaigns. When that deadline is reached, the project is no longer open for the crowd to fund. Kickstarter has a campaign deadline of a maximum of 60 days in general. According to them, the fewer days you have, the higher the success rate a project will have. But that is not always the case. Reality is often far from what we expect. 60 days or two months will not be enough, to be honest. Kickstarter thought was noble that less time will put a sense of urgency among the funders. But that does not always work. Moreover, Kickstarter will not let you have uncompleted funds. Which means that it is all or nothing. Thus, you should look for a platform that offers more time for a project to reach its deadline. Indiegogo has a deadline of only 40 days. So that would not work either. We would suggest you look for a crowdfunding platform that has a deadline of 180 days (3 months), or no deadline at all. For example, GoFundMe. This Kickstarter alternative has no deadline for crowdfunding. Thus, you can drop your project there and have no urgency for it to be completed. But still, we would like you to keep a deadline. Otherwise, the project may lose its value to you and the crowd.
- Transaction fee
A transaction fee is a fee that the crowdfunding platform will charge from you as commission. Kickstarter has a 5% transaction fee. Also, there is a 3% – 5% payment processing fee. All this sums up to approximately a 10% fee from your complete funding. These fees will be charged when the project is funded. Otherwise, you will have no funds to work with. Different crowdfunding platforms have different transaction fee rules. The less the fee, the more the funds you will have to work with. Here is a comparison table of different crowdfunding platforms and their transaction fees.
|Transaction Fee||5%||3% – 4%||6%||0%|
|Payment Process Fee||3% – 5% of total fund + $0.05 – $0.20 per pledge||0% for US bank accounts only||1.9% of total fund + $0.30 per funders|
|Other Fee||5% – 8% Platform fee||2% Crowd Safe fee|
- Campaign approval process
All crowdfunding platforms have to remain their standards and reputation. They do it by imposing certain rules and regulations on the parties involved with their platform. These rules and regulations are directly related to their campaign approval process. Take Kickstarter for example. If you want your campaign/ project to be approved on their platform, it must not violate any rule of the community. Moreover, it must fall under any creative category of the 15 Kickstarter categories. If all of these are satisfied, it will take about 30 hours for your project to get full approval. That was Kickstartar’s process. It is different for Indiegogo, and GoFundMe. You should have a product/ concept of a product ready for the campaign, right? Before choosing a Kickstarter alternative, make sure to go through all the rules of the crowdfunding platforms to see which ones match your product. Choose those for launching your product.
- Platform Niche
If you launch your project/ campaign on the wrong platform, it will not succeed. Suppose a crowdfunding platform is best known for funding smart electronics technology projects. If you launch a winter jacket there, it won’t work. You may get one or two random funders/ backers, but that won’t do you any good. So even if a crowdfunding platform has your product niche under its radar, make sure that the platform is known for promoting and funding those types of products. You can do some research on those platforms. Or you can Google the niche of your product to list the suitable candidates of crowdfunding platforms for analyzing them. You will have to spend ample effort on this, but it will all pay off in the end when your product will be funded completely by the crowd on that platform.
- Investment Opportunities
When we think of crowdfunding, we think of taking funding from the crowd in exchange for something in return. Sometimes it is a unit of what they are investing for, but sometimes it is exclusive content.
These are the basics. Some funders aren’t interested in these items. They are interested in something more valuable. Equity. Equity means part of the profit your product will earn after it is successfully funded and launched. So, it is like an investment opportunity. A project with an investment opportunity has a higher rate of success. Unfortunately, all crowdfunding platforms don’t allow you to offer equity in return for the contribution of the backers. Kickstarter does not allow investment on projects to offer equity at all. Not offering equity/ allowing investment on projects is not necessarily a bad thing. But having an investment opportunity will surely boost the success rate of your project/ campaign. So, if you want to make your campaign successful, we recommend you choose a platform that allows you to open investment opportunities in your campaign.
By competitors, we are not referring to the platforms of crowdfunding. Rather we are referring to the projects/ campaigns running on the platform and how the algorithm of the platform responds to them together. Let us explain what we meant with an example. Suppose you have a full-proof idea of a child’s bracelet that can track the child and prevent him/ her from getting lost. So, it is in the smart electronics technology niche. Now you are planning to launch it on GoFundMe as it is one of the best alternatives to Kickstarter in case of fees and deadlines. Now suppose there is another campaign running on GoFundMe which is similar to yours. If the algorithm of GoFundMe recommends other projects more than yours, then you have a low chance of success in reaching your goal. That is why it is important to know the algorithm of the platform you choose for your campaign. Unfortunately, it requires heavy knowledge in Data science to understand and predict the algorithm. You may need to hire a data scientist to understand the algorithm of each platform. That way you can get a heads up about your competitors on that platform and revise a plan for countering their effects.
The audience plays a big role in the success of your campaign. Surely you have a plan for that when building your campaign/ project. Now all you need to do is see if those audiences are involved in the Kickstarter alternative platform that you have chosen. You can browse the current projects on the platforms and see their success rate to understand what kind of audience is involved there and what are their interests. It may seem like a small factor, but it has a great effect on the success of your campaign on the platform.
As we are talking about launching a campaign on a crowdfunding platform, you need to consider a lot of factors about your target audience. As discussed previously, we need to take the interest of our audience into an account. Because if they are not interested in your project/ campaign, they will not be interested at all in funding/ investing it. Besides their interest, we need to see if it is related to their geographical location. The geolocation of your target audience plays a critical role in the success of your campaign. If your project is local to the audience, they will have fewer doubts and be more interested in investing or funding.
But suppose if your campaign is not involved with the country of your target audience, they won’t be so interested. Because it will have lots of implications in shipping and fund transferring. So when you are launching a project/ campaign, try to choose a local audience as your target. Also, keep the interest of the audience in mind. A balance between interest and geolocation can boost the success of your campaign.
- What happens to incomplete funds
You must understand that you won’t be able to complete your project if you do not reach the targeted fund. However, some platforms do not give you collected funds if they do not receive the targeted value. You could say that those platforms are either all or nothing. Kickstarter was one of those platforms, but now they have changed their policy. Now Kickstarter gives the collected funds to the campaign creator. This helps a lot because he/ she may cover up the remaining expenses from other sources. So, you should choose a platform that has the same policy of giving you the collected funds even after the target is not reached. Even though we cannot call it a success, you can collect the rest of the targeted funds via other means.
- UX of website
Lastly, we will have to consider the website UX of the Kickstarter alternative crowdfunding platform. What is UX? UX is short for user experience. How a user feels while browsing through a website is referred to as the UX of that web page. Why is it important? Because no one would bother to go through a webpage that offers terrible UX. They prefer a smooth and liquid experience. Just think of Kickstarter and GoFundMe’s webpage. They have a smooth UI that offers a great user experience. If they have a smooth experience, they can easily browse your campaign. You can use that UI to present your campaign/ project to them in a far better way. That way they will be able to connect more deeply with your cause and fund you. Use your judgment to decide which Kickstarter alternative has a better UI that provides good UX. One more thing that we like to point out regarding UX is that make sure the platform has a mobile app. Also, be sure that the mobile app is functional and working smoothly. That will ensure more engagement from your audience.
These are the top 10 things that you should know about Kickstarter alternative platforms. The most important things are its user engagement and experience and your campaign deadline. Also, it should have your target audiences involved. If you can make sure of that, then you should worry about the financial aspect of the transaction fees, collected funds, and other aspects. If you can go through all of these factors, then there should be no problem in finding the best platform for Kickstarter alternatives. We would also recommend you launch your project on multiple crowdfunding sites.