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Crowdfunding FAQs

Is crowdfunding free money?

Crowdfunding can be a better option for start-ups and creative projects to raise money than a business loan, and in that way can be better for early-stage ideas.

While it’s free to set up a campaign on most crowdfunding sites, they typically collect a fee after you raise money to meet your funding goal and your successful campaign ends. These fees could come in the form of placement fees or platform fees, depending on which platform you use.

When you launch a crowdfunding campaign, you’re essentially asking backers to put money toward your product. You are accountable to your donors and need to report to them through updates if you hope to run more campaigns and launch more crowdfunded projects in the future.

Which crowdfunding site is the best?

It depends on the kind of crowdfunding you’re trying to do. The best crowdfunding sites all have their own unique niches.

Kickstarter and Indiegogo allow for many ventures overall, while Causes is regarded as the best for nonprofits and Patreon is the best for creators. LendingClub is a great place to look for crowdfunded business loans, and GoFundMe is considered the best for personal fundraising.

What is crowdfunding and how does it work?

Crowdfunding is the process of raising money through a group of people, or backers. Crowdfunding platforms give entrepreneurs, business owners, and creators a place to reach funders and tell them about their projects in exchange for a donation, a reward, or equity in the company.

The exact format of your fundraising campaign depends on your organization or product and what your goals are.

How do you run a successful crowdfunding campaign?

The specifics of your crowdfunding campaign will largely depend on the project, but the most important thing to think about is your fundraising goal. If you set an attainable goal that will fund your entire project, you’ll build goodwill with your backers.

Successful crowdfunding projects also engage their target audience and keep that engagement going through the end of a tight time frame to raise money.

What does a crowdfunding specialist do?

A crowdfunding specialist provides a variety of crowdfunding services to help your project reach its fundraising goal. Hiring one could bring valuable digital marketing skills to your team as you launch, maintain, and promote your crowdfunding project through social media. For Upwork crowdfunding experts, pricing varies and could be hourly, project-based, or commission-based, or they could use a hybrid model.