There are several ways to make money with a crowdfunding portal. What you choose depends on your overall business’s mission, whether crowdfunding is the sole focus or part of a bigger idea, as well as what kind of value you want to create. In this article, we will explore four business model ideas for crowdfunding portals.
Commissions on Funds Raised
A commissions model is the most common in the crowdfunding space because it’s easy for fundraisers to understand. It’s risk-free for them because you bear the risk by paying for software and support without the certainty of earning anything back. Commissions require high volumes to make any good amount of money.
A listing fee model is more common on equity crowdfunding platforms simply because the structure of the investment doesn’t allow for commissions. The fees can be one-off or monthly. You’re guaranteed to earn these fees regardless of what happens, however, you won’t benefit from a project’s potential success.
A transaction fee model is a middle-ground between commissions and listing fees. Every time someone makes an investment or a donation, you can add a non-refundable, fixed, or variable transaction fee for using the service. It’s less popular but can prove effective in building sustainable revenues.
Most fundraisers will need videos, pictures, and marketing. Some will also need more specific services like order management and fulfillment. Offering such added-value services makes your users’ lives easier and earns you more money.
These are just four business model ideas for crowdfunding portals, but you can easily be creative and come up with new ones. Feel free to share any of your ideas!