Crowdfunding is a powerful concept for startups and small businesses to get help from the community. A well-run financing campaign can help to bridge the gap between a startup and future customers. Since you are reading this blog, you are at the right place to learn more about building a perfect crowdfunding website. With our step-by-step guide, you'll get all the answers you need. Before jumping into the topic, let's understand more about it.
What is crowdfunding?
Crowdfunding is the process of donating money to support any startup. For example, it can be an artist, a patient, or any community that needs money to grow. Campaign creators usually conduct fundraising through an online platform. By creating a website, campaign creators can make their cause visible and help them to connect with a larger audience.
Crowdfunding helps several artists and small businesses to generate a handsome amount of money to meet their goals. Fundraising shows the power of community.
As per the reports, on average crowdfunding campaigns can make $28,656. In 2020 there were over 6.4 million crowdfunding campaigns. As per the studies and reports, by 2030, experts expect that crowdfunding will reach $300 billion in funding. To learn more, check out these detailed reports.
Types of crowdfunding
People often consider raising funds to help others, using one or the other crowdfunding method. The goals are the same for making a campaign to help someone, but the benefits for supporters are not the same. The category chosen determines
the type of crowdfunding:
These four are the most well-known crowdfunding types and have different benefits. Reward-based and donation-based crowdfunding are almost identical. The core difference is that reward-based funding includes a reward for the support. Rewards can be anything non-financial such as goods and services. Meanwhile, donation-based funding, as the name suggests, is a donation at will without any expectation. It gives an internal feeling of happiness for helping.
Equity-based crowdfunding is when a company sells ownership shares to investors in exchange for funding. Debt-based crowdfunding is when a company borrows money from a group of lenders, paying back the investor's loan with interest.
How does crowdfunding work?
The process usually involves registering a campaign on the fundraising website with the goals and target. Interested people start to take interest and donate as per their financial situation. Once the fundraising campaign reaches its goals, the creator receives the funds. And the platform earns a commission, which varies from 5% to 20%.
How to start a crowdfunding website? - Step by step Guide
“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” - Abraham Lincoln
Step – 1 Choosing the right business model
Before jumping into the detailed process, it is necessary to take several actions to future-proof your goal. For example, we must ask ourselves several questions before going all out. It's essential to analyze the pros and cons of the idea you are thinking of, so it is recommended to research and gather knowledge before taking any further steps.
Long-term goals: Before starting, it is necessary to think long-term so we don't lose motivation. You must pre-plan things like gathering enough knowledge to ramp up the starting process. It's mandatory to plan the investment and time you have to put in so that you don't allow the ups and downs to come in your way. Long-term planning helps you to make your business sustainable for the long term.
Research others website: Researching means checking out other crowdfunding websites too. Analyzing how they built their platforms and what features they provide to users will help you create your website.
What type of UI are they using?
Features on their website
Difference between websites with different Crowdfunding niches.
How much profit do they make?
What sort of niche has a solid customer base?
These are some topics you can research. Here are some crowdfunding websites that you can look for IndieGoGo, Kickstarter, Wefunder, Gofundme, and FundersClub. All these websites contain different niches and provide similar financing for fundraising. For example, WeFunder, Kickstarter, and IndieGoGo belong to Reward-based crowdfunding. GoFundMe is based on donation crowdfunding. Meanwhile, Capitalraise and Funderclub are Loan-based and equity-based crowdfunding.
Investment to make: The last point is all about how much you are prepared to invest. A Crowdfunding website needs an initial investment. It's necessary to build a robust website. Investment also depends on how clear you are about your long-term goals and what specific needs or features you add to your website. The more quality and features you expect from your website, the higher the initial investment.
It's not necessary to build a full-fledged website with all gimmicks and features to be successful, but still, the better the website, the greater chances are high of success
Step – 2 choosing the right niche
Just like to win a race, you need a well-built car, similarly, you need a well-performing niche to help you outperform other websites. It's the pre-planning that assists you to out-run your competition. Choosing the right niche is tough, but with the correct strategy, it becomes easy. Choosing the right niche is valuable because not every fundraising website becomes successful.
Consider this basic niche selection idea that can help you to find the niche that belongs to you. Like every other website, you need to analyze the niche that has low competition, high demand, more interested customers towards the topic, and profit or loss.
While choosing a niche, choose the type of model you need for your crowdfunding website. Generally, there are four types, as we mentioned earlier. Pick the best model for you, as every model has its pros and cons.
Step - 3 Getting all things together
After conducting thorough research and finalizing the niche, it is time to take the first step toward building the website. While analyzing is important, it is also essential to establish connections with others who share similar goals. This can contribute to your success. Although not mandatory, having a network of like-minded individuals can be beneficial.
It is important your website complies with all legal regulations, including securities laws, data privacy laws, and anti-money laundering laws. Ensuring all this compliance can be difficult, but it will make your website future-proof with your legal regulations.
After summing up everything, building some good connections, and finalizing the budget for your website. The second big task is to find the right software development company for your needs, and what to look for in an agency. And that’s what we will discuss in the next step
Step - 4 Choosing the right agency to make your website
When developing a feature-rich crowdfunding website, it is necessary to pick a software development company that is right for you. You can count on the website that provides the best ECP (Experience, communication, and pricing).
Experience: An experienced team can provide you with the most quality work, as they have enough skills in the field. Appoint someone with years of exposure and expertise in developing websites. An experienced agency can assist you with launching your website.
Communication: One of the biggest mistakes people make when working with an agency is not communicating well. It's essential to work with someone who has good communication skills. It helps you get better results and pricing. Agencies with experience handling many clients tend to have better communication skills. Having Good communication is also an indicator of reliable customer support, making an agency a more reliable option for your project.
Pricing: As a startup, you must choose wisely where your money is going for investment. The last thing you need is to get in debt before even starting your website. Hire someone who works under your budget and provides the best value for your buck.
Want to learn more about crowdfunding?
Step - 5 Investing small with an MVP
A general definition of MVP is a minimum viable product, a version with just enough features to be usable by early customers, who can then provide feedback for future product development. For easy understanding, an MVP development is a trial or a smaller version of a product with an adequate feature usable by new customers.
Importance of MVP: Before launching a full-fledged website, it's vital to understand what key features are needed to add to your website. MVP helps with experimenting with your website needs so you do not go overboard with unwanted features added to your website.
Another benefit of MVP before Launching a website is you get a general idea of your targeted audience. For example, think of MVP as a magnet and needle as a targeted Audience. MVP helps you attract customers who are interested in your services. They will try your product and give you feedback to create a better version out of MVP. The new adapter promotes you to create a larger audience later.
Benefits of MVP
Filter out your targeted audience
Minimizing unwanted features and saving money
Refining ideas of service with audience feedback
With a targeted audience helps to make a marketing strategy for later.
Examples of MVP for Crowdfunding website: A Minimum Viable Product (MVP) for a crowdfunding website typically includes the essential features. Here are some examples below that you can use for your upcoming projects.
MVP is a powerful tool for targeting an audience by validating your idea with feedback and generating early adapters. If you intend to learn more about MVP, don't miss out on our detailed guide on Minimum viable products (MVP).
Step – 6 Designing the website
When creating a crowdfunding website, it's necessary to add details to your website that look appealing and convincing. There are no hard and fast rules to follow, but to do things better than the other platforms. It's the best practice to follow some crucial points so that your website stands out. So, here are some fundamental guidelines to abide by, which will serve as a solid foundation:
Taking a minimalistic approach: A first impression tends to create a compelling idea for the first-time viewer of the website. So, it's necessary to make a website that looks minimalistic, clean, and elegant with enough details provided. Also, using a website theme that flows with the website niche. For example, using a vacation theme on a crowdfunding website will negatively impact the user. While designing the website, we think adding every possible detail will help users to learn more about our services. Instead, doing so works against you and makes it hard to read the website, and that is the last thing we need. To sum it up, design a website that looks minimalistic, simple, and convincing to the user.
Using convincing colors: While making a visual appearance, you must use colors appropriate for the design. Using the right color can significantly influence the perception and emotional response of the audience. By carefully choosing the right color, you can enhance the impact and effectiveness of your design, making it more compelling and engaging.
Easy-to-use navigation: The navigation bar is the key to your pages. Think about a car that does not have proper wheel alignment. It's the same thing with the navigation bar, a good nav bar helps your user to surf through your website easily. Here are some quick pointers so you can understand them easily.
It should be easy to navigate.
Seamless user experience in every type of screen
Easy exploration for users to find any campaign
Navbar guides you through all pages of your website in one click. So, it's crucial to link pages to the navigation mentioned below:
CTA Buttons: A CTA (Call-To-Action) button is a critical element of a crowdfunding website that motivates users to take action, such as making a contribution or starting a campaign. To make a CTA button most effective, it should be visually prominent with a clear message to take action and placed strategically on the webpage. By designing a compelling CTA button, crowdfunding platforms can increase the likelihood that users will engage with the site and take action to support crowdfunding campaigns.
Multimedia support: Multimedia support is an essential feature of modern websites. Allows the website to incorporate media support, such as images, videos, audio, and animations. Supporting multimedia on a website can enhance the user experience by making the content more engaging and interactive. Another benefit of adding media support to your website is it opens the gates of marketing for campaign creators. They can add lots of videos, images, and animations if needed to attract supporters during the start of the new campaign.
Step- 7 Adding Features to your website
After creating a perfect web layout, it's time to add some features to your website. Every website has features that help it withstand the competition. By adding a fair number of features and a good interface to your website, you can make the user have a good experience and it is easier to use.
We will discuss how to add features that can make a crowdfunding website more engaging and user-friendly for both project owners and supporters.
The type of user visiting determines the basis of some tools mentioned here. You can differentiate them with campaign creators or project owners and supporters. To make it simple and easy to understand, we added a table that separates the features for campaign owners and supporters.
Features for Campaign Creators:
Features for Supporters:
Project creation tool: Project creation tool that helps the individual to create a new campaign by adding essential details. These tools are critical to creating compelling campaigns that resonate with their target audience and inspire them to support the project. With the help of this tool, campaign creators can build project pages, set goals, and communicate their vision to potential supporters. You can also create a more appealing tool by providing a step-by-step guide to creating a campaign for new users. By providing easy-to-use project creation tools, you can empower campaign creators to join your platform and bring their ideas to life.
Payment Gateway Integration: Your website must have a reliable, fast, tried, and tested secure payment gateway, as a crowdfunding website runs with cash flow most of the time. It can also take multi-currencies with different payment options. A well-integrated payment gateway helps build trust and is essential for the success of any crowdfunding campaign.
Social sharing: The social sharing tool is a feature that allows sharing of campaign details on social media. With the help of this tool, the campaign helps to reach a larger audience and helps to generate more support. By providing easy-to-use social sharing tools, crowdfunding platforms can help campaigns to achieve their funding goals more quickly and efficiently.
Project Analytics: This tool helps provide data and insights on the performance of the campaign. Think like it's a performance card of the student providing all details about positive and negative. The tool includes a dashboard that displays key metrics like the number of supporters, funding progress, and traffic source of the campaign. With necessary details like traffic sources, the campaign creator can make the marketing strategy for the specific region to improve the campaign.
Communication tool: Communication is critical for the success of any crowdfunding campaign. To engage with supporters, fundraising platforms use a communication tool. This tool allows campaign creators to send updates and messages to their supporters, respond to questions and comments, and build relationships.
Rewards Management: The rewards management tool allows campaign creators to manage the rewards offered to their supporters. This tool enables campaign creators to set up reward levels, define the perk for each level, and manage the fulfillment of perks.
Search and Discovery Tools: As the name suggests, the discovery tool is the tool used for finding the campaign as per supporter needs. These tools typically include search filters, recommendation engines, and trending campaign lists that help supporters find campaigns that match their preferences. The search filter allows backers to refine their search based on many criteria, such as campaign category, funding goal, location, or campaign stage. The recommendation engine uses machine learning algorithms to suggest campaigns to supporters. Based on their browsing history, pledging behavior, and other factors, like Youtube and Amazon.
Pledge Management: Pledge management is a feature on crowdfunding websites that helps supporters keep track of their pledges for a campaign. When they support a campaign, they are promised to be given a certain amount of money as a reward. This tool allows them to track their pledges, manage payment information, and communicate with the campaign creator about their rewards. For example, if a backer wants to change their pledge amount, they can use this tool to adjust the amount and select a new reward tier. Supporters can also use the tool to view their payment history, update their payment information, and manage their shipping addresses for physical rewards. By providing an easy-to-use pledge management tool, crowdfunding platforms can help to ensure that campaigns run smoothly and ensure good support for backers.
Supporter Analytics: This is a feature on the website that provides campaign creators with data and insights on their supporters. With the help of this tool, a creator can keep an eye on the supporter. This tool is convenient for a campaign creator as it gives deep dive into data about supporters, such as the location, age range, the amount pledged, and the rewards or perks they selected. Deep data like this helps campaign creators to target their audience for future goals. Allow them to create a marketing strategy to generate better results. These features are found on most crowdfunding websites as they are critical to the success of both campaign creators and backers. There are several other features that you can also consider.
Fund calculator: A funds calculator is a practical tool that can help startups estimate the funds they need to raise for their project. This tool takes various expenses such as taxes, platform commission, and payment processing fees, giving an accurate estimate of the required fund.
Pre-launch page: Adding a pre-launch page feature allows supporters to do so without starting the campaign. Allowing the campaign creator to attract a larger audience before launch and helping to spread awareness of his upcoming project.
Step – 8 Testing face for your crowdfunding website
After putting in lots of time and effort to develop your website, it's time to test your work. As to make mistakes is human, your website needs to go through the testing phase. The testing phase refines your website to take it to the final stage. So, it's necessary to test all the features and the overall website before launching.
Step – 9 Pre-monetizing your website before the launch
While running a business, marketing plays a crucial role in making your first audience. There are ways to pre-monetize your website before launch. Pre-monetizing a crowdfunding website involves generating revenue for the platform before it's launched. Here are some strategies that crowdfunding websites use to pre-monetize.
Step – 10 Launching the website
After going through all the effort, it's time to launch a website. If you follow all the steps, it will help you create a website that gives a platform to users in need. If you are drafting to launch a full-fledged crowdfunding website, our team can guide you with every step mentioned here in detail. With our experience making crowdfunding websites, you can trust us to make your website as good as you planned.
Acquaint Softtech Experience on Building a Crowdfunding Website
Our team at Acquaint offers top-notch web development services to help leading companies in various industries achieve their goals.
As we are a leading software development company, we offer services in web and app development, here are the services we offer to build your dream website.
As we said earlier, we have enough experience in making websites. To give you a detailed analysis, here is a small case study of the website that we created named Artscause. These will help you to understand making a crowdfunding website.
For making ArtsCause, we used technologies that fit the needs of our clients.
Backend Development: PHP
Journey of building a crowdfunding Art Website with ArtsCause
A crowdfunding website aimed at artists, an ART niche to support emerging artists, Walter Allen established ArtsCause. ArtsCause aimed at providing a space for artists to showcase their work and receive support from their community. Partnering with ArtsCause, Acquaint created a platform for artists, a bridge between artists and their supporters and bringing their creative visions to life.
Requirements of ArtsCause
Building a crowdfunding website needs enough research and analysis. ArtsCause has a clear vision of its needs for the website, so it gets easy for us to understand them. As per their requirements, they needed a website with:
A seamless user interface with easy-to-use navigation for users, coupled with social media integration for sharing and promoting campaigns.
A secure payment gateway that accommodates various currencies, making it easy for supporters to pledge from different parts of the world.
A comprehensive campaign tracking system that provides real-time updates and analytics to campaign creators, allowing them to make informed decisions throughout the fundraising process.
A responsive customer support system that provides timely and functional assistance to users, ensuring that needs are fulfilled.
Overcoming the challenges
Creating a crowdfunding website faces various other challenges beyond building a website. For example, a Crowdfunding website compliant with legal regulations is crucial to avoid future issues. The second challenge is to make a CMS that can handle new campaigns. Crowdfunding websites need a robust CMS that can handle different types of campaigns. And lastly, a well-tested secure payment gateway for easy and dependable money handling.
ArtsCause approached us with the idea of creating a crowdfunding website for the ART niche. As their vision aligned with our expertise, we took up the project and worked with the client to provide the best possible results. Our goal was to build a website that was user-friendly, secure, and compliant with all legal regulations.
How Acquaint Helped ArtsCause to Achieve Their Goal
Building trust is crucial in crowdfunding, and we created a website that looked reliable and trustworthy. The website had a colorful, artistic design with a secure payment gateway that made it easy for supporters to donate. We also added a system to track every type of campaign, which helped users keep track of their progress and ensure they were meeting their goals.
In conclusion, we were honored to work with ArtsCause to build a crowdfunding website for the ART niche.
In conclusion, starting a crowdfunding website in 2023 can be a fruitful business venture. But it requires careful planning, execution, and ongoing management. Using this guide with the right approach and dedication will take you a step ahead of your competition. Following this step and the small case study we provided will help you to grow your crowdfunding business.
If you are also interested in making a similar website like ArtsCause or want to hire a remote team, do check out our skilled team of remote developers to help you grow your business.
How much does it cost to make a crowdfunding website?
It depends on the requirements of a website, so it's hard to give the perfect figures here. But a website with a basic set of features costs you from $10,000 to $25,000 and with more added features, it goes up to more than $500,000.
What type of features do Crowdfunding websites use?
Crowdfunding websites use a range of features that benefit different sets of users. The feature list includes all types of users for both campaign creators and supporters.
How long does it take to set up a crowdfunding website?
In general, crowdfunding websites made from scratch will take around 3 to 6 months. The time it takes to set up a crowdfunding website can vary depending on several factors, including the complexity of the project, and the sets of features needed on the website.
If the project is big and a website requires more sets of features, then it will easily take 6-8 months.
How many types of crowdfunding websites are out there?
The type or category of a crowdfunding website varies by how they provide value to the supporter. The category chosen determines the type of crowdfunding.
What are the requirements for crowdfunding websites?
To start a crowdfunding website, it's crucial to understand the main requirements that the website must fulfill.