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Introduction To Crowdfunding Platforms In UK
Crowdfunding has revolutionised the way entrepreneurs, artists, and philanthropists raise money for their projects. Crowdfunding in the UK has gained immense popularity, making it easier than ever for individuals and organisations to turn their ideas into reality. With a wide range of crowdfunding platforms available, it can be overwhelming to choose the right one for your needs. In this ultimate guide, we will explore the best crowdfunding platforms in UK, their features, fees, and everything you need to know to make an informed decision.
Types Of Crowdfunding In The UK
Before diving into the top crowdfunding platforms in the UK, it’s essential to understand the different types of crowdfunding available. The UK offers four main types of crowdfunding: equity-based crowdfunding, reward-based crowdfunding, debt-based crowdfunding, and donation-based crowdfunding.
- Equity-based crowdfunding allows individuals to invest in a company in exchange for shares or equity. This type of crowdfunding is popular among startups and small businesses looking to raise capital and gain support from investors.
- Reward-based crowdfunding involves offering rewards or products in return for financial contributions. This type of crowdfunding is commonly used by creative individuals, such as artists, musicians, and filmmakers, who offer unique experiences or limited-edition products to their backers.
- Debt-based crowdfunding, also known as peer-to-peer lending, allows individuals or businesses to borrow money from a crowd of lenders. The borrowed funds are repaid with interest over a specified period.
- Donation-based crowdfunding is primarily used by charitable organisations and individuals seeking financial support for a cause. Backers contribute funds without expecting any financial returns, driven solely by their desire to make a positive impact.
Understanding these different types of crowdfunding will help you determine which platform aligns best with your goals and project requirements.
Benefits Of Using Crowdfunding United Kingdom
Crowdfunding in UK offer numerous benefits to both project creators and backers. Let’s explore the advantages of using crowdfunding platforms in UK.
- Wider reach: Crowdfunding platforms connect you with a vast audience interested in innovation or charitable work.
- User-friendly tools: Most platforms offer campaign creation tools, fund management, and communication features.
- Social media integration: Sharing campaigns on social media boosts visibility and engagement.
- Credibility: Reputable platforms add trust and encourage contributions.
- Flexible funding: Whether you aim to raise a little or a lot, platforms allow customised funding goals.
15 Best Crowdfunding Platforms In UK
Now, let’s dive into the top 10 best crowdfunding platforms UK. Each platform offers unique features and benefits, catering to different types of projects and fundraising goals.
1. WhyDonate
WhyDonate provides a comprehensive crowdfunding solution for individuals as well as organisations. Being one of the best donation-based crowdfunding platforms in the UK, WhyDonate connects fundraisers with potential donors who are looking to support meaningful causes. The platform offers a user-friendly interface, access to a network of potential investors, and robust campaign management tools. Additionally, WhyDonate offers a dynamic dashboard to its users that is equipped with options like fundraising page customisation, immediate payouts, and donation tax receipts.
Fees – WhyDonate charges a 0% platform fee and a minimum of €0.25 + 1.9% transaction fees to all its users.
👉 Create your campaign with WhyDonate now and turn your idea into reality.
2. GoFundMe
GoFundMe also specialises in donation crowdfunding, making it an excellent choice for creative individuals and artists. It is one of the most trusted crowdfunding platforms in the United Kingdom that provides a seamless campaign creation process, social sharing features, and analytics to track your campaign’s progress.
Fees – GoFundMe charges a 0% platform fee and 25p + 2.9% transaction fees to its users.
3. Indiegogo
Indiegogo is a popular crowdfunding platform that allows individuals and organisations to raise funds for their projects or causes. Users can create campaigns and set a funding goal, and then solicit donations from the general public. Indiegogo supports a wide range of projects, from creative endeavours such as films and music albums to gadgets and new products. One of the unique features of Indiegogo is its flexible funding option, which allows campaigners to keep the money they raise even if they don’t reach their funding goal.
Fees – Indiegogo charges a 5% platform fee and 3%*+£0.20 transaction fees to its users.
4. Crowdcube
With a focus on equity-based crowdfunding, Crowdcube connects entrepreneurs with investors who are looking to support innovative ideas. The platform was born in the UK and has a rigorous vetting process to ensure that only high-quality businesses are listed on the platform. It also offers a range of tools and resources to help businesses prepare for their crowdfunding campaign, including pitch advice and legal support.
With equity crowdfunding, investors receive shares in the company in exchange for their investment. Mini-bonds, on the other hand, offer investors fixed returns over a set period of time without offering equity in the company. Investors on Crowdcube can browse through a range of opportunities to find businesses they want to support. They can invest as little as £10 and can track their investments through their online portfolio.
Fees – Crowdcube charges a success fee of 7%, excluding VAT and a completion fee, which is, on average, 0.75% – 1.5% of all funds raised. Crowdcube also has other charges – reference.
5. Fundable
Fundable is a crowdfunding platform that allows individuals and small businesses to raise funds for their projects and ideas. The platform offers a variety of funding models, including reward-based, equity-based, and donation-based crowdfunding.
The platform also offers resources and support for project creators, including tools for building and managing campaigns, as well as access to a network of potential backers and investors. One of the key features of Fundable is its advanced investor management tools, which allow businesses to track and manage investor relationships and provide updates and progress reports on their fundraising efforts. This helps businesses stay engaged with their investors and build long-term partnerships.
Fees – Fundable charges $179/month to create and manage fundraisers and also charges a processing fee of 3.5% + 30¢ per transaction.
6. Kickstarter
Kickstarter is a popular crowdfunding platform that was founded in 2009. It allows individuals and businesses to raise funds for creative projects by soliciting pledges from a large number of people, typically over the Internet. Kickstarter has become an important platform for entrepreneurs, artists and inventors who want to turn their ideas into reality.
To get started on Kickstarter, a user must first create a project page that outlines their idea, funding goal, and rewards. The project creator then sets a funding goal and a deadline, usually around 30 days. Once the project is live, backers can pledge money towards the project and receive rewards based on the amount of their pledge. If the project reaches its funding goal by the deadline, the creator receives the funds and starts the project. If the project fails to reach its funding goal, no money is collected, and the project is cancelled.
Fees – Kickstarter operates on an all-or-nothing funding model. This means that projects must reach their funding goal within a specified period of time, or all pledges are refunded. Kickstarter charges a platform fee of 5% on all funds raised, and payment processing fees of between 3% to 5% are also charged by the payment gateway provider.
7. Seedrs
Seedrs is a crowdfunding platform based in the United Kingdom that allows investors to invest in startups and early-stage businesses. Investors can browse through various investment opportunities and view detailed information about each startup. Seedrs also offers an Auto Invest feature, which allows investors to invest in startups that meet their criteria automatically.
Seedrs uses a nominee structure, which means that it holds the shares on behalf of the investors. This structure ensures that investors have the same rights and protections as direct shareholders. Seedrs also offers a secondary market where investors can sell their shares to other investors. However, there are certain restrictions on when and how shares can be sold.
Fees – Seedrs charges a success fee of 6% of the total amount of funds raised by the startup. In addition, there is a project completion fee of £2,500 with a payment processing fee of between 0.5% and 1.0%.
8. JustGiving
JustGiving is a crowdfunding platform that allows individuals and organisations to raise money for various causes. It was founded in 2000 in the United Kingdom and has since expanded globally. JustGiving’s platform is designed to be user-friendly and easy to navigate. Users can create a fundraising page in just a few minutes and customise it with photos, videos, and text to tell their story and inspire donations. The platform also offers a range of tools and resources to help fundraisers promote their campaigns and engage with supporters.
Fees – JustGiving has a flexible platform fee option with a transaction fee of 2.9% + 25p.
9. Funding Circle
Funding Circle is a debt-based crowdfunding website that offers a streamlined and user-friendly experience for borrowers and investors. The platform was founded in 2010 and has since facilitated more than $10 billion in loans. The platform conducts a credit assessment and assigns a risk rating to each loan. Investors can then view loan listings and select which ones to invest in. Once the loan is fully funded, the funds are disbursed to the borrower. The borrower makes repayments to the investors over the loan term. Funding Circle also handles loan servicing, including collections and reporting, on behalf of investors.
Fees – Funding Circle has a payment structure for Loans of 6 – 12 months: 0.9 – 4.9%,
2 – 3 years: 2.9 – 6%, and 4 – 5 years: 4.5 – 6%.
10. Crowdfunder
Crowdfunder is a reward-based crowdfunding platform in UK. To start a crowdfunding campaign on Crowdfunder, project creators must first create a campaign page and set a funding goal. They can then offer rewards to backers at different pledge levels, such as early access to the product, exclusive merchandise, or personalised experiences. Once the campaign is live, backers can pledge money to support the project and receive the promised rewards if the project meets its funding goal. If the goal is not met, backers are not charged, and the project creator does not receive any of the pledged funds.
Fees – Crowdfunder does not charge any platform fee to charities. However, it charges a 5% platform fee to other projects. It also charges a transaction fee of 1.9% or 2.4% + 20p + VAT.
11. Abundance Investment
Abundance Investment is a UK-based debt crowdfunding platform that focuses on green and ethical projects. It allows everyday investors to put their money into projects that tackle climate change, such as renewable energy, sustainable housing, and low-carbon transport. Abundance offers fixed-income investments and prioritises transparency by clearly explaining the risks and potential returns for each project. It’s an excellent choice for socially conscious investors.
Fees – Abundance does not charge fees to investors. The platform earns through fees from the companies raising funds.
12. Crowd2Fund
Crowd2Fund is a hybrid platform offering equity and debt-based crowdfunding opportunities. It’s tailored for startups and growing UK businesses looking for investment while offering investors returns through revenue loans or equity stakes. Crowd2Fund supports a secondary market for trading investments and uses innovative features like Smart-Invest, which allows automatic allocation based on user preferences.
Fees – Crowd2Fund charges a 6% success fee on funds raised and a 1% fee on investments from backers.
13. SeedBlink
Although SeedBlink is headquartered in Romania, it has expanded into the UK and EU markets and is now actively supporting UK-based startups. This equity crowdfunding platform combines traditional venture capital with community investing, allowing both individual investors and institutional partners to co-invest in vetted startups. Its intuitive platform, co-investment model, and curated deal flow make SeedBlink a fresh but reliable option for equity crowdfunding in the UK.
Fees – SeedBlink charges a 2% platform fee to investors and up to 7% success fee for startups.
14. Ethex
Ethex is a UK-based ethical investment platform offering both equity and debt-based crowdfunding for social enterprises and environmentally-focused initiatives. The platform is ideal for investors who want their money to make a social or environmental impact. Projects often include community energy, social housing, and sustainable farming. Ethex also makes it easy for retail investors to discover and support values-aligned organisations.
Fees – Ethex does not charge investors; fees are charged to the organisations raising funds, typically around 5%-7%.
15. Angel Investment Network
Angel Investment Network is a matchmaking platform connecting entrepreneurs with angel investors globally, including a strong presence in the UK. While it’s not a traditional crowdfunding platform in the reward or donation sense, it plays a vital role in equity-based funding by offering startups access to a vast network of private investors. Entrepreneurs pitch their businesses, and interested investors can initiate direct discussions.
Fees – Listing a startup is free with optional premium packages. A 5% success fee applies if you connect with investors through the platform.
Tips for Successful Crowdfunding Campaigns In The UK
Running a successful crowdfunding campaign requires careful planning and execution. Here are some tips to help you maximise your chances of success in the UK:
- Set realistic funding goals: Be realistic about the amount of money you need to achieve your project’s objectives. Setting an achievable funding goal increases your credibility and motivates backers to support your campaign.
- Tell a compelling story: Craft a compelling narrative that resonates with your target audience. Clearly communicate your project’s purpose, impact, and why it deserves support. Use engaging visuals and videos to enhance your storytelling.
- Build a strong network: Start building a network of potential backers before launching your campaign. Engage with your audience through social media, events, and industry communities. Leverage your network to create buzz and generate initial support for your campaign.
- Offer attractive rewards: Design enticing rewards that incentivise backers to contribute to your campaign. Ensure that the rewards align with your project’s theme and provide value to your supporters.
- Communicate transparently: Keep your backers informed about your project’s progress and any challenges you may encounter. Regularly update them through campaign updates, emails, and social media. Transparency builds trust and keeps your backers engaged throughout the campaign.
These practices are vital for boosting visibility and engagement for your crowdfunding in UK.
Get Started With The Best Crowdfunding Platform UK
Online fundraising platforms UK have democratised the funding landscape, allowing individuals and organisations to pursue their dreams and make a positive impact. In this ultimate guide, we explored the different types of UK crowdfunding platforms, their benefits, factors to consider when choosing a platform, and the best online donation platforms UK.
We also delved into charity crowdfunding, equity crowdfunding, and fundraising platforms. Armed with this knowledge, you are now equipped to make an informed decision and embark on a successful crowdfunding journey.
Ready to take the next step? Choose the right platform, follow best practices, and start fundraising with crowdfunding United Kingdom today!
