Crowdfunding is changing the way many businesses are funded, and that means you have more options when it comes to finding customers. There are a variety of platforms out there. So how do you know which one to choose? We have compared two popular crowdfunding platforms for your small business – Kickstarter and Gofundme – to help you find the right option for your individual needs.
While Kickstarter and Gofundme are both popular crowdfunding platforms, there are some distinct differences between the two that you should consider before deciding to launch your campaign on one or the other. This guide will help you decide which platform is best for your needs by explaining the qualifications, purpose of project funding, fees and terms of use, and rewards. Let us get started.
What is Kickstarter?
The Kickstarter platform is a crowdfunding website that helps people fund creative projects. The main focus of this website is on projects in the fields of art, music, and film – which makes sense given the overwhelming success it has seen so far. Some of these projects are more likely than others to get funded within the campaign timeframe, but if you do not reach your goal, you will not get funded at all! This means that if you do not reach your funding goal within that time frame, you’ll just have to wait for another attempt and continue down that path until you succeed – or give up and abandon your project altogether.
All-or-nothing funding allows backers to not face pressure from funders who expect full results for a project, even if it ends up not being fully funded (tempered expectations). There are also no fees if your campaign fails!
What is GoFundMe?
GoFundMe is a crowdfunding website where individuals and personal causes can be funded. There are many campaigns on the site that fund education, medical treatment, and sports teams alike. The lack of an independent community perhaps makes up for the shareability of this platform. Also, the fees are the same whether you are fully or partially funded, so you can not expect 100% results even if you only reach 5% of your goal amount. The site was started in 2010 by Brad Damphousse, who wanted people to have access to fundraising opportunities regardless of their financial means or location.
Read the success stories of GoFundMe here.
Kickstarter vs GoFundMe: Project Qualifications
To launch a successful crowdfunding campaign, it’s important to know the different project qualifications that need to be considered. On both Kickstarter and GoFundMe, these are outlined in the terms and conditions.
Kickstarter has five five rules for running successful campaigns.
- All projects must create something that you can share with others.
- The project and backer statistics should be presented honestly and clearly in order to maintain trust in the community of backers.
- Kickstarter insists on not offering fundraisers from existing charities or organizations that use Kickstarter as a means to raise money, because they feel these organizations already have enough resources at their disposal without begging people on a crowdsourcing platform like theirs;
- Equity stakes are not allowed in projects or in the rewards received in the process (instead, there are reward tiers that do not involve equity stakes);
- Prohibited items may not be included in campaign materials, even if they are labeled “adults only” so that everyone can safely participate from start to finish.
There is a stark difference between the two platforms in terms of rules. GoFundMe campaigns are not as closely monitored, meaning they do not require pre-approval before launching. This means that there is little to no control over what people can use their money for on the platform – whether it’s illegal activities or pornography and other illegal materials like guns, drugs, and hate speech.
Kickstarter vs GoFundMe:Funding Scheme
Kickstarter’s funding scheme is an all-or-nothing system. This means that if you do not reach your goal by the end of the campaign, it’s game over for any funds that have been pledged to your project. The pressure this puts on creators can push them to create their best work. However, there are some things we should consider before backing an idea that may be high risk and may not get fully funded: If Kickstarter will not let us pay for failure ($0), was our time wasted? If so, what does that say about their credibility as a platform? What happens if a KS does not get fully funded (minus the 5% fee)?
As for funding on GoFundMe, it’s either fully funded or flexible: whether you reach your goal or not, you get to keep the amount raised. One difference between Kickstarter and GoFundMe is that Kickstarter does not charge a fee if you do not reach your goal, while GoFundMe charges a fee whether your fundraiser is fully or partially funded. Still, keep in mind what results donors expect even if they do not get 100% funded. GoFundMe also provides various fundraising tips and fundraising ideas.
Kickstarter vs GoFundMe: Fee structure and Terms of Service
Kickstarter charges five percent of the amount raised, while GoFundMe does not charge for the use of its platform. Kickstarter charges a processing fee of 3% + $0.20 per pledge, while GoFundMe charges 2.9% + $0.30 per pledge. For payments under $10, Kickstarter only receives five percent in fees plus another 50 cents from backers, resulting in a maximum fee of $10, while GoFundMe has no fees at all for low-value donations! Finally, when it comes to the length of the campaign and the conditions for success or failure, both platforms have their pros and cons, as well as different time limits (60 days vs. unlimited).
Kickstarter is a crowdfunding platform with a maximum campaign duration of up to 60 days. The “all or nothing” condition means that all donations are returned to donors if you do not reach your goal by the deadline. GoFundMe, on the other hand, allows donors to keep the amount raised even if they do not reach their goal in time.
Kickstarter vs GoFundMe: Campaign Process
There are some differences between the application process on Kickstarter and GoFundMe. To start a campaign on either platform, you essentially need to provide information about yourself and your planned crowdfunding campaign, and then submit it. On Kickstarter, 80% of campaigns are approved, which is pretty good. With a 20% rejection rate, considering how many people apply to use the site – an unfortunate number – GoFundMe may be a better fit if your project is truly unique or special and does not need too much validation before launching.
Kickstarter vs GoFundMe: Customer Service
Both platforms have different reputations when it comes to customer service. GoFundMe is generally considered to have a faster and more reliable customer support system, guaranteeing a response within 5 minutes or less to all submitted questions – unlike Kickstarter’s ticket queue, which has a slower but still functional service model. GoFundMe’s Customer Happiness agents are available 24/7. This means that you can get personalized support and get in touch with one of their customer support agents if needed. However, at this time, GoFundMe does not offer in-depth phone or email support, but they do have an easy-to-reach Help Center with plenty of resources for all your questions! Using the ‘Contact Us’ button on the website or elsewhere, you can reach a customer service representative who will respond to any questions you have within 2 business days. On the other hand, some people have had bad experiences with Kickstarter Customer Service. The support ticket system seems to be inadequate when users need immediate help. As a result, many people rely on other methods of communication like email or phone contact to get questions answered.
Kickstarter vs GoFundMe: Rewards and pledges
On Kickstarter, a perk is called a reward and the number of tiers can be unlimited. Also, this program lets you set an expiration date for your perks. So you can create super early bird or limited time offers! On Indiegogo, these options are not available. So if you want limited-time perks, use Kickstarter instead.
Unlike GoFundMe, Kickstarter charges you at the end of the campaign when the goal is reached. This means that if a backer makes a pledge and then decides not to buy your project or cancels it before the deadline, you will only receive payments for the amount pledged and not for any potential item sales. When your crowdfunding ends, the number of backers may drop by about 5-10%, so you can reevaluate the situation.
Like Kickstarter, you can also offer rewards on GoFundMe in the form of branded products, discounts, coupons, and vouchers. This incentivizes people to participate in your fundraiser while offering them exciting opportunities. You can also offer tickets as a reward for their donation. This is a smart way to motivate donors while covering your business costs!
Kickstarter vs GoFundMe: Transparency
Both Kickstarter and GoFundMe offer a high level of transparency. Both have their terms clearly laid out in their user agreements, which include how much of a cut they will receive if a particular campaign succeeds or fails. In addition, both platforms only get paid when a single project is funded by them – especially Kickstarter – as the percentage fee is equal to the final amount raised.
Kickstarter vs.GoFundMe: Updates
GoFundMe and Kickstarter are two different crowdfunding platforms, one of which does not allow you to edit your posts. However, Kickstarter allows you to save updates as drafts so you can make changes later if needed. Also, when messaging or emailing your campaign update, keep in mind that your message will not be sent until 30 minutes after you send it! If something is wrong with the update before then, they can fix it within that time frame by clicking “Save Draft.” Another advantage Kickstarter has over GoFundMe is that they use tools like CrossProm to promote each other’s campaigns under updates here too! You can do this for free and easily find similar projects to agree on using CrossProm.
GoFundMe is a great platform to share updates with your donors. Whenever you have news to share, you can write and email it to everyone who is subscribed to your campaign. You can thank your supporters for their contribution, let them know how close you are to reaching the goal you set before the campaign started, share tangible results, let donors know how well the recipient is doing, and share photos or videos – you can even post a video of what happened in real life! Ask for support to – share someone else’s GoFundMe page to get their attention!
Final Thoughts
Kickstarter and GoFundMe are the two leading crowdfunding sites that cater to different audiences. So it would make little sense to name a winner or loser in this comparison. However, by highlighting the similarities and differences between the two platforms and considering which platform is best for your needs, we hope you’ll get a better idea of which platform to use depending on your funding goals!
Choose Kickstarter if:
- You want to raise money to produce something creative (art, film, board games, etc.)
- Your project is crowdfunding based, specifically designed for creative ventures.
- You plan to offer rewards to your backers in exchange for their support.
Choose GoFundMe if:
- You want to raise money for a personal cause/emergency/tragedy, whether for yourself or a friend or family member.
- You want to raise money for a business/entrepreneurial venture but do not want to pay a 5% platform fee.
- If you are raising money for an idea and reaching your goal is not important, this strategy allows you to keep all the money you raise regardless of whether it reaches its goal.
Related :How to Finance Your Startup in 2021?
