Key highlights
- Crowdfunding is a modern way to raise funds from a large group of people, usually online.
- Platforms like Kickstarter and GoFundMe make it easy to share your story and receive support.
- Types of crowdfunding include rewards, donation, equity and debt.
- Bluehost gives you everything you need to build a professional crowdfunding site with fast hosting, secure checkout options and integrated marketing tools.
Introduction
Crowdfunding is a way to fund a project, idea or cause by collecting small amounts of money from a large number of people, usually online. It’s how Ryan Grepper raised over $13 million on Kickstarter in 2014 for a high-tech cooler—without any investors. Just an idea, and a community that believed in it.
That’s the power of knowing what is crowdfunding.
The global crowdfunding market is expected to grow at a compound annual growth rate (CAGR) of 13.5% between 2025 and 2032, driven by tech innovations and social fundraising platforms. This growth shows that crowdfunding is not just a trend—it’s becoming a mainstream solution for funding and growth.
So, if you’re sitting on an idea but feel stuck because of money, now is the right time to start crowdfunding. In this guide, we’ll explain what crowdfunding is, how it works and how you can launch your own campaign.
What is crowdfunding?
Crowdfunding is a fundraising method that allows individuals, startups and nonprofits to collect small contributions from a large number of people. It is done usually online through a crowdfunding platform, instead of relying on traditional investors or loans.
This approach has powered many crowdfunding efforts across industries and causes. To run a successful crowdfunding campaign, you need to capture the attention of backers and convince them your project is worth supporting.
How does crowdfunding work?
Crowdfunding works by collecting small amounts of money from many people—usually online—to fund a project or cause. You start by choosing an idea and setting a funding goal and deadline.
Launch a campaign and begin the investment process on a crowdfunding portal like Kickstarter or GoFundMe. Then, promote your campaign to attract backers.
If you meet your goal, you receive the funds (minus platform fees) and deliver rewards or updates to your supporters.
Note: Most crowdfunding platforms take a percentage of the funds raised. For example, Kickstarter charges a 5% platform fee and additional fees apply for payment processing.
Examples of crowdfunding
The global crowdfunding market is projected to grow from $1.83 billion in 2025 to $4.45 billion by 2032. Excluding debt and equity-based models, this funding style has supported countless new business ventures.
Some examples include:
- Looktech AI Glasses (2025): This AI-powered smart eyewear campaign raised $1,192,236 on Kickstarter. It gained traction due to its sleek design, AR integration and a strong video pitch highlighting real-life use cases.
- Cosmere Roleplaying Game (2023): Based on Brandon Sanderson’s Cosmere universe, this tabletop RPG raised $14.7 million from 52,658 backers on Kickstarter—making it the highest-funded roleplaying game in Kickstarter history.
- LA Wildfire Victims (2025): In response to the devastating Los Angeles wildfires, GoFundMe campaigns collectively raised more than $100 million to assist affected families, communities and businesses. This massive outpouring of support underscores the platform’s role in mobilizing aid during crises.
What are the pros and cons of crowdfunding?
Like any funding method, crowdfunding has its strengths and limitations. Before launching a campaign, it’s important to weigh the benefits of crowdfunding against the possible challenges. Here’s a quick comparison to help you weigh both sides:
| Pros of crowdfunding | Cons of crowdfunding |
| You can raise significant funds that may be difficult to secure through traditional sources like banks or investors. | There’s a high risk of failure—over 358,000 projects have been unsuccessfully funded on Kickstarter. |
| It helps test interest in your product or project before fully committing to it. | You’ll likely need to cover upfront costs like marketing, videos and prototypes. |
| You can retain full ownership without giving up equity or control. | Sharing your idea publicly before development risks it being copied. |
| There’s less financial risk—funds are secured upfront and usually refunded if the campaign fails. | You must pay crowdfunding platform fees and handle backer communication and fulfillment. |
| You can define your own targets, deadlines and reward structures. | Success depends heavily on your ability to promote and manage the campaign. |
Crowdfunding can be a powerful way to bring your idea to life, but it isn’t without challenges. A successful campaign requires careful planning, compelling storytelling and consistent communication with backers. With the right approach, the rewards can far outweigh the risks.
What are the types of crowdfunding?
There are four main types of crowdfunding: donation-based, rewards-based, equity-based and debt-based. Each serves a different purpose—whether you’re funding a cause, launching a product, raising capital or seeking a loan. Choosing the right model depends on your project goals and what you offer backers in return.
Here’s a quick breakdown of the four main types:
| Type | How it works | Ideal for | Do you repay? |
| Rewards-based crowdfunding | Backers contribute to exchange for a product, perk or experience. | Creators, startups, product launches | No |
| Donation-based crowdfunding | Supporters donate money with no expectation of returns or rewards. | Nonprofits, personal causes | No |
| Equity-based crowdfunding | Contributors receive shares or equity in your business. | Startups, early-stage companies | No (but they gain equity) |
| Debt-based (P2P) crowdfunding | You borrow funds from individuals and repay with interest. | Small businesses, individuals needing loans | Yes |
Each type of crowdfunding has its pros and limitations. Choosing the right one depends on your goal:
- Want to launch a product? → Try rewards-based crowdfunding.
- Supporting a cause? → Go with donation-based.
- Need investors for a startup? → Choose equity-based crowdfunding.
- Looking for a loan? → Opt for debt-based (P2P) crowdfunding.
Understanding these differences can help you pick the approach that fits your project and audience best.
Let’s explore different crowdfunding model types. So, you can choose the one that fits your goals from donation-based, equity-based crowdfunding or a peer-to-peer fundraising model.
1. Rewards-based crowdfunding
In this type of crowdfunding, individuals contribute to a project in exchange for a service or product. Many crowdfunding projects offer rewards to early backers, such as exclusive product access or experiences, making this a great way to build community engagement.
For example, an eco-friendly water bottle campaign can structure rewards like this:
- $10 pledge: Thank-you email and a digital booklet on sustainability.
- $25 pledge: One eco-friendly water bottle.
- $50 pledge: One water bottle and a branded, reusable carrying bag.
- $100 pledge: Two water bottles, two bags and the name listed on your website.
- $250 pledge: Family pack, reusable bags and a virtual production tour.
2. Donation-based crowdfunding
Donation-based crowdfunding is when people give money to support a cause with no expectation of getting anything in return. It’s ideal for nonprofits or personal causes like medical expenses, education or community projects.
For example, if you’re raising funds to build a community library, people may contribute because they believe in the project’s impact. They won’t do it for rewards or recognition.
To build trust, keep supporters updated during and after the donation-based campaign. You can share progress through blog posts and regular updates on your crowdfunding site.
3. Equity-based crowdfunding
Equity-based crowdfunding allows you to raise money for your new business by offering shares to multiple potential investors online. It’s a great alternative to traditional funding methods like venture capital or bank loans.
Instead of paying back a loan, you give backers a small stake in your business. These shares are usually unlisted, meaning they aren’t bought or sold on public stock exchanges.
In the U.S., equity-based crowdfunding is regulated by the Securities and Exchange Commission (SEC) and usually involves both accredited and non-accredited investors. It offers crowdfunding investment opportunities without relying on traditional funding sources like venture capitalists or bank loans.
4. Debt-based crowdfunding
Debt-based crowdfunding is when you borrow money from multiple individuals through a platform and repay it with interest. It’s similar to a loan, but the funds come from regular people instead of a bank.
This model, also known as peer-to-peer lending, allows individuals to finance projects through an online platform and earn interest-based returns.
However, you’ll likely need a good credit score to qualify. Because this is a loan, repayment with interest is required—just like any other borrowing arrangement.
Which crowdfunding platforms are best?
Popular crowdfunding platforms include Kickstarter for creative projects, Indiegogo for tech and flexible funding, and GoFundMe for personal causes. Patreon suits ongoing content creation. Each platform differs in fees, features, and goals—so choose one that aligns with your fundraising strategy.
Here’s how these top platforms compare:
| Platform | Best for | Key features | Fees |
| Kickstarter | Creative projects, product launches | All-or-nothing funding model; strong community support | 5% platform fee; payment processing fees between 3% and 5% |
| Indiegogo | Tech innovations, flexible funding | Offers both fixed and flexible funding options; InDemand feature for ongoing online fundraising | 5% platform fee; payment processing fees approximately 3% + $0.20 |
| GoFundMe | Personal causes, emergencies | No platform fee; donor protection guarantee; fast setup | 0% platform fee; transaction fee of 2.9% + $0.30 per donation |
| Patreon | Creators with ongoing content | Monthly memberships; exclusive content for supporters | 5–12% platform fee depending on plan; payment processing fees of 2.9-5% per transaction; 2.5% currency conversion fees |
The best platform for your campaign depends on your funding model, audience and long-term goals. Look closely at the fees, features and community before making your pick.
Let’s explore more details about each crowdfunding platform:
1. Kickstarter
Launched in 2009, Kickstarter is one of the most popular crowdfunding platforms for creative projects. It uses an all-or-nothing model—if you don’t meet your funding goal, you don’t get the money from Kickstarter.
As of 2025, the platform has helped fund over 277,300 projects with backing from nearly 24.1 million people. According to Statista, around 41.98% of launched projects on Kickstarter are successfully funded, highlighting the importance of strong pre-launch promotion.
Fees: 5% platform fee, plus 3–5% for payment processing.
2. Indiegogo
Indiegogo began in 2008 as a crowdfunding site for independent films. A year later, it expanded to support a wide range of project categories.
Today, Indiegogo has a community of over 9 million backers spanning 235 countries and territories. Its flexible funding model allows campaigners to receive money as it comes in, even if goals aren’t fully met.
The platform is ideal for tech, innovation and nonprofit projects. Indiegogo supports both fixed and flexible funding, meaning you can keep funds even if you don’t reach your goal. Its InDemand feature lets you continue raising funds after your campaign ends.
Fees: 5% platform fee and ~3% + $0.20 per transaction for payment processing.
3. GoFundMe
GoFundMe is best for personal causes, emergencies and medical fundraising. It doesn’t charge a platform fee and is known for its donor protection guarantee.
Since its founding in 2010, GoFundMe has raised over $30 billion, making it the largest crowdfunding platform for personal and charitable causes.
Fees: 0% platform fee, but 2.9% + $0.30 per donation for processing.
4. Patreon
The platform works best for creators offering ongoing content—think artists, podcasters or YouTubers. Patreon uses a subscription model where fans support creators monthly in exchange for exclusive perks.
Over 10 million patrons support creators monthly, and the platform has paid out more than $8 billion to creators.
Fees: 5–12% platform fee depending on plan, 2.9-5% payment processing fees and 2.5% currency conversion fees.
How to plan and launch a crowdfunding campaign?
Successful fundraising campaign strategies start with clear goals, the right crowdfunding platform and a strong promotion plan. Here’s how to launch your crowdfunding campaign and achieve fundraising goal:
1. Define your goal
- Set a clear funding target: Determine the exact amount you need and how it will be used.
- Establish a timeline: Decide your campaign’s duration, keeping it long enough to gain traction but short enough to maintain urgency.
2. Choose the right platform
Select a platform that aligns with your project’s nature and audience. For instance:
- Kickstarter: Ideal for creative projects with tangible outcomes.
- Indiegogo: Suitable for tech innovations and flexible funding needs.
- GoFundMe: Best for personal causes and emergencies.
- Patreon: Designed for creators offering ongoing content.
3. Identify your target audience
- Understand your backers: Research who is most likely to support your new project.
- Tailor your message: Craft your campaign to resonate with your intended audience.
4. Craft a compelling story
This is a core part of effective fundraising campaign strategies that build emotional connection and trust.
- Explain the ‘why’: Clearly articulate the purpose and impact of your project.
- Highlight benefits: Show potential backers what they gain by supporting you.
5. Plan your rewards or perks
If using a rewards-based model:
- Offer meaningful incentives: Provide perks that are valuable and relevant to your backers.
- Structure tiers wisely: Ensure each reward level offers increasing value.
6. Create a promotional strategy
- Leverage social media: Use platforms like Facebook, Twitter and Instagram to spread the word.
- Engage your network: Reach out to friends, family and colleagues for initial support.
- Consider press outreach: Contact relevant blogs or media outlets to feature your campaign.
7. Prepare visuals
Using compelling imagery and short video snippets can increase user engagement and encourage potential donors to contribute money to your cause.
- Use high-quality images and videos: Visual content can significantly boost engagement.
- Demonstrate your product or cause: Show prototypes, behind-the-scenes footage or testimonials.
8. Launch and monitor your campaign
- Build anticipation: Tease your campaign before the official launch.
- Engage with backers: Respond to comments and messages promptly.
- Provide updates: Keep supporters informed about progress and milestones.
9. Post-campaign follow-up
- Fulfill rewards promptly: Deliver on promises to maintain trust.
- Maintain communication: Keep backers updated on the project’s ongoing developments.
- Gather feedback: Learn from your experience to improve future campaigns.
Don’t forget to thank your backers—expressing appreciation can inspire continued support and strengthen relationships for future crowdfunding efforts.
Do I need a crowdfunding site for my campaign?
Yes, having your own crowdfunding website can take your campaign to the next level. Many crowdfunding platforms like Kickstarter or GoFundMe handle donations.
A dedicated crowdfunding site builds trust, strengthens your brand and gives you full control over your messaging. This is where Bluehost can help. Bluehost is also officially recommended by WordPress.org, making it one of the most trusted providers for hosting WordPress websites.
Why is Bluehost WordPress hosting ideal for a crowdfunding website?
For anyone planning a successful crowdfunding campaign, having a reliable website matters. Bluehost WordPress hosting includes automatic backups, staging environments for safe updates and built-in marketing plugins like Yoast SEO and CreativeMail—perfect for crowdfunding campaigns.
We offer powerful hosting infrastructure combined with tools and features tailored for WordPress users—whether you’re a beginner or running a growing online business.
Here’s what sets Bluehost WordPress hosting apart:
- One-click WordPress installation: Get started quickly without any technical setup.
- Free domain name (1st year): Choose your custom web address without paying extra.
- Automatic WordPress updates: Keep your site secure and up to date—hands-free.
- Built-in SSL certificate: Protect your site and build visitor trust with HTTPS.
- Optimized speed and performance: Fast load times with caching and CDN support.
- 24/7 WordPress-specific support: Access a team that knows WordPress inside out.
- Free themes and plugins: Access to curated tools to design and enhance your site.
- Staging environment: Test changes before going live without breaking your site.
- Marketing integrations: Built-in Yoast SEO, email marketing (Creative Mail) and social sharing.
- Ideal for: Bloggers, creators, freelancers, small businesses and eCommerce stores.
Final thoughts
A well-executed crowdfunding initiative harnesses the power of community support—helping startups, nonprofits and creatives bring bold ideas to life. Even if you’re testing a new product, crowdfunding harnesses community support to offer a low-risk, high-reward path to getting started.
Success doesn’t just come from having a great idea. It takes thoughtful planning, clear storytelling and the right tools to run a professional campaign that builds trust and inspires action.
Start your crowdfunding journey with Bluehost WordPress hosting, featuring one-click WordPress setup, free domain registration and SEO tools to promote your campaign effectively. With built-in marketing tools and reliable performance, Bluehost gives you everything you need to engage backers and grow your audience online.
Ready to launch your crowdfunding campaign with confidence? Get started with Bluehost WordPress hosting today and turn your campaign into a success story.
FAQs
It depends on the type of crowdfunding you choose:
1. Donation-based and rewards-based crowdfunding: No repayment required.
2. Debt-based campaigns (also called peer-to-peer lending): You must repay the amount with interest.
3. Equity crowdfunding: No repayment but offers investors a financial return through ownership stakes.
Yes, especially for startup companies, small business owners and nonprofits who want to raise capital without relying on banks or venture capital. With a strong crowdfunding campaign and realistic fundraising goals, you can successfully raise money and build long-term support.
Timing varies by platform. Most release funds within 7–14 days after a successful crowdfunding campaign ends.
Often, yes. In rewards-based crowdfunding, money raised in exchange for goods or services is generally taxable income. So, always check with a tax advisor to understand how taxes apply to your specific campaign structure.
The most effective fundraising campaign strategies include:
1. Setting a clear goal.
2. Telling a compelling story.
3. Using strong visuals.
4. Promotion across multiple channels.
5. Offering rewards or incentives.
6. Keeping backers updated regularly.
The major benefits of crowdfunding include:
1. Quick access to capital without traditional loans
2. Community validation for your idea
3. Ability to build a loyal customer base early.
4. Increase brand awareness.
5. Gather valuable feedback before launching a full-scale product.
Common pitfalls include setting unrealistic goals, weak promotion, vague storytelling and poor communication with backers. A strong plan makes all the difference.
Yes! You can launch a crowdfunding campaign on your own website using WordPress hosting from Bluehost, giving you full control over fees, branding and communications.
