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An Overview Of Crowdfunding In The UK – Top 10 Crowdfunding Platforms In UK

Crowdfunding Platforms In UK

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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 Platforms

Crowdfunding platforms offer numerous benefits to both project creators and backers. Let’s explore the advantages of using crowdfunding platforms in UK.

Firstly, crowdfunding provides access to a large audience of potential backers. By showcasing your project on a platform, you can reach individuals who are interested in supporting innovative ideas or charitable causes.

Secondly, crowdfunding platforms offer a streamlined and user-friendly process. They provide tools and resources to help you create compelling campaigns, manage funds, and communicate with your backers. This convenience saves you time and effort, allowing you to focus on bringing your project to life.

Additionally, crowdfunding platforms facilitate social sharing and networking. They often integrate with popular social media channels, making it easy for backers to share your campaign with their networks. This viral effect can significantly increase your project’s visibility and attract more backers.

Furthermore, crowdfunding platforms provide a level of trust and credibility. Backers feel confident contributing to projects hosted on reputable platforms that have established a track record of successful campaigns. This trust factor can boost your project’s credibility and encourage more people to support your cause.

Lastly, crowdfunding platforms offer flexibility in terms of funding goals. Whether you’re aiming to raise a modest amount or a significant sum, you can set a target that aligns with your project’s needs. This flexibility ensures that crowdfunding is accessible to projects of all sizes.

10 Best Crowdfunding Platforms In UK

Now, let’s dive into the top 10 fundraising platforms in UK. Each platform offers unique features and benefits, catering to different types of projects and fundraising goals.

1. WhyDonate

Crowdfunding In the UK - WhyDonate

WhyDonate provides a comprehensive crowdfunding solution for individuals as well as organisations. Being one of the best donation-based crowdfunding platforms, 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.

2. GoFundMe

Crowdfunding platforms in UK- GoFundMe

GoFundMe also specialises in donation crowdfunding, making it an excellent choice for creative individuals and artists. It is one of the most popular charity crowdfunding platforms that provide 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

Crowdfunding UK - 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

Crowdcube - UK crowdfunding platforms

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

Crowdfunding platforms in UK - 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

online donation platforms UK - 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 online fundraising platforms UK

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- best crowdfunding platforms UK

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 crowdfunding in the UK

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 - UK crowdfunding platforms

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.

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.

By implementing these tips, you can increase your campaign’s visibility, attract more backers, and achieve your fundraising goals.

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 bring your ideas to life? Explore the top crowdfunding platforms in the UK and start your campaign today!

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