Crowdfunding platforms have become increasingly popular in the United Kingdom over the past few years, with more and more people turning to these platforms to raise money for their projects and business ventures. These platforms provide an easy and efficient way for entrepreneurs, small businesses and individuals to raise money from a large number of people, without the need for traditional funding sources such as banks or investors.
In this article, we will take a closer look at some of the most popular crowdfunding platforms in the United Kingdom, including an overview of each platform, their fees, regulations, crowdfunding model and payout system. Whether you’re an entrepreneur looking to raise money for your business, or an individual looking to fund a personal project, this article will provide you with the information you need to choose the right platform for your needs.
- Kickstarter
Kickstarter is one of the most well-known and popular crowdfunding platforms in the world, and it’s also one of the most popular platforms in the United Kingdom. The platform was founded in 2009 and has since raised over $4 billion for various projects and businesses.
Kickstarter operates on a rewards-based crowdfunding model, which means that backers can choose from a variety of rewards depending on their pledge amount. Rewards can range from a digital download of the project to a limited edition physical product, and they are usually delivered to backers within a few months of the campaign ending.
The platform has a strict vetting process and only allows projects that are creative, innovative and have a clear plan for how the funds will be used. Kickstarter also has a “all-or-nothing” funding model, which means that if a project doesn’t reach its funding goal, no money is collected from backers.
Fees: Kickstarter charges a 5% fee on successful campaigns, and a 3% payment processing fee. Once a project is successfully funded, the funds are transferred to the project creator’s account within 14 days.
- Indiegogo
Indiegogo is another well-known crowdfunding platform that has been around since 2008. The platform has raised over $1 billion for various projects and businesses, and it’s also one of the most popular platforms in the United Kingdom.
Like Kickstarter, Indiegogo operates on a rewards-based crowdfunding model and allows project creators to offer a variety of rewards depending on the pledge amount. The platform is more open than Kickstarter and allows any type of project to be listed, including non-creative projects such as medical expenses and personal loans.
Indiegogo also has a “flexible funding” option, which means that project creators can choose to keep the money they raised even if they don’t reach their funding goal.
Fees: Indiegogo charges a 5% fee on successful campaigns, and a 3% payment processing fee. For campaigns that choose the “flexible funding” option, Indiegogo charges an additional 9% fee.
Indiegogo is not a regulated platform and does not provide any guarantee that a project will be completed or that backers will receive their rewards.
Payout system: Once a project is successfully funded, the funds are transferred to the project creator’s account within 14 days.
- Crowdfunder
Crowdfunder is a UK-based crowdfunding platform that focuses on social and community projects. The platform was founded in 2011 and has since raised over £20 million for various projects and businesses.
Crowdfunder operates on a rewards-based crowdfunding model and allows project creators to offer a variety of rewards depending on the pledge amount. The platform also has a “keep it all” option, which means that project creators can choose to keep the money they raised even if they don’t reach their funding goal.
Crowdfunder has a strict vetting process and only allows projects that align with their mission to create positive social and community impact. The platform also partners with various organizations, such as local councils and government bodies, to provide additional support and resources to project creators.
Crowdfunder charges a 5% fee on successful campaigns, and a 3% payment processing fee. For campaigns that choose the “keep it all” option, Crowdfunder charges an additional 5% fee.
Once a project is successfully funded, the funds are transferred to the project creator’s account within 14 days.
- Seedrs
Seedrs is a UK-based crowdfunding platform that focuses on equity crowdfunding, which means that backers can invest in a company and receive a share of the company’s equity. The platform was founded in 2012 and has since raised over £400 million for various companies.
Seedrs has a strict vetting process and only allows companies that have a clear business plan and are in a viable industry to be listed on the platform. The platform also provides additional support and resources to companies, such as access to a network of investors and business mentorship.
Seedrs charges a 7.5% fee on successful campaigns, and a 1% annual management fee for the shares held on the platform.
Once a campaign is successfully funded, the funds are transferred to the company’s account within 7 days.
With regards to regulation, The Financial Conduct Authority (FCA) is responsible for regulating crowdfunding platforms and campaigns in the UK. The FCA requires all firms offering crowdfunding services to be authorized by it and follows the rules set out in the FCA Handbook. This means that crowdfunding platforms in the UK must comply with strict rules and regulations designed to protect investors and ensure that crowdfunding is conducted in a fair and transparent manner.
In conclusion, crowdfunding platforms in the United Kingdom provide a variety of options for entrepreneurs, small businesses and individuals looking to raise money for their projects and ventures. From rewards-based platforms such as Kickstarter and Indiegogo, to equity crowdfunding platforms like Seedrs, there is a platform for every type of project and business. It’s important to research and compare the fees, regulations and payout systems of each platform before deciding which one to use for your campaign. With the right platform, a solid business plan and a great rewards, you’re well on your way to reaching your funding goals.
