Last December, Nur-E Farhana Rahman sat in an Uber car in New York City, tears streaming down her face. Her months-long project to raise $30,000 on Kickstarter, to expand production at her jewelry company, was about to end in failure.
Rahman had thought she was prepared to crowdfund: After she and her mother started Knotty Gal, which handmakes knotted necklaces and other accessories, she intensively researched successful campaigns and planned her own. More than 120 people gave her almost $18,800–but by Kickstarter’s all-or-nothing rules, falling short of her goal meant the entire campaign had come to naught.
“We probably picked the wrong platform,” says Rahman, referring to a Kickstarter audience that tends to favor gadgets over jewelry. “We chose Kickstarter because it had more users, but more doesn’t mean better quality if it’s not the demographic you’re trying to target.”
It’s all too easy to make that mistake, especially as crowdfunding’s popularity–and seeming accessibility–grows so rapidly. Last year, North American crowdfunding and peer-to-peer lending campaigns raised $9.46 billion, up 145 percent from 2013, according to consulting firm Massolution.
So how do you know which platform is right for your startup? Pay attention to pricing, the type of campaign a platform specializes in, and what sort of users it attracts, says Jason W. Best of Crowdfund Capital Advisors. We’ve compiled these details along with fundraising estimates for U.S. platforms. So before you start asking for money, consult our guide to cultivating the popular crowds.
*Source: Data on funds raised per platform and per sector is according to the companies and Massolution estimates.
GET MONEY FOR A CAUSE
If you have an idea for helping the world–or just yourself–but no product or service to give backers, you’re basically asking for charity. That’s OK: A donor platform lets you fundraise with no obligations to investors. Common uses range from the selfless (starting nonprofits or socially conscious businesses) to the more, well, self-centered (including medical bills and vacations).
Read more at INC.