Create a Crowdfunding Platform: 10 Tips for Getting Started

By doing so, they help raise the necessary capital for development. In return, after the campaign ends, they receive rewards, such as a free product, etc.

Crowdfunding has proven particularly successful for startups but is also used for non-profit purposes. Nowadays, there are numerous platforms on the market, and it can be quite a lucrative business.

In this article, we’ll show you how to take advantage of the crowdfunding platform boom and provide ten tips to help you successfully create your own crowdfunding platforms in Germany.

The Most Important Points at a Glance

Crowdfunding Platforms: What Are They Exactly?

A crowdfunding platform is a business model that allows companies to have creative projects, but also technical devices, PC games, and a variety of other ideas financed by the community.

For example, say you have an idea for a new vacuum cleaner that you believe could be successful, but you lack capital. A campaign on a crowdfunding platform might be just what you need.

Simply pick one of the crowdfunding sites that support projects like yours and create a crowdfunding campaign in which you introduce your idea to the platform’s users. People on these platforms regularly look for new crowdfunding projects.

If your project appeals to them, they may be willing to support you by making an investment in your idea. If enough people invest, you could reach your goal and receive enough money from the crowd to develop your new vacuum cleaner. That’s where the term crowdfunding (sometimes also called crowdinvesting) comes from. Pledges for funding a campaign can be either one-time payments or monthly contributions.

10 Tips for Success with Your Crowdfunding Platform in Germany

In this section, we present ten expert tips to help you become familiar with crowdfunding and create your own crowdfunding platform in Germany. Additionally, these tips will help you reach your funding goal by encouraging others to invest via crowdfunding, i.e., they will back your idea.

I. Choose a Niche or Industry

Most crowdfunding sites specialize in a particular area.

For instance, the established Kickstarter crowdfunding platform is particularly known for tech projects, PC games, etc., and was the first platform of its kind. You can find Kickstarter campaigns for PC games, USB coolers, and many other gadgets.

GoFundMe, on the other hand, facilitates charitable projects as well as initiatives from a wide range of people, allowing them to contribute even small amounts to help.

Patreon is a platform for freelancers, especially musicians, artists, and other service providers seeking ongoing financial support.

You, too, must decide which niche or industry to focus on.

II. Conduct a Market Analysis

Many platforms are currently on the market. Besides the ones already mentioned, there are others for crowdfunding, including Crowdfunding.de, Betterplace.org, Betterplace.me, Mezzany, or EcoCrowd.

You should examine all these providers in detail. How do they structure their fees? What are the success rates for campaigns on those sites? Which types of projects are posted most frequently?

Gathering this information gives you vital data for analyzing the competition and positioning yourself in the marketplace.

III. Choose an Appropriate Theme

Build a creative and sustainable website with an appealing theme. The site should be clearly laid out so that visitors immediately understand its purpose. They should be able to navigate the site quickly and easily to find projects of interest.

Filters should allow them to specify precisely what they’re looking for, ultimately presenting them with a list of relevant projects.

The menu should be intuitive, and all essential features must be prominently highlighted.

IV. Develop a Modern Backend

Whether it’s a small startup or a larger enterprise, those who decide to host a crowdfunding project on your platform will need a modern, secure backend. It should enable users to create new campaigns and also provide information on ongoing ones. For instance, how much revenue has been generated? Who is new? Which backers have pledged amounts, and what perks are tied to each level of support? All these details are crucial for effective campaign management.

Especially important is data on whether a campaign has reached or exceeded its pre-set minimum funding goal. At the same time, investors must be able to swiftly find the right pledge tier and manage expenses, benefits, etc.

V. Be Your Own Customer

Once your website is live, it’s time for you to become your own customer. Launch a project together with your team. Do you encounter any problems or errors? Is anything missing or in need of improvement? Can you easily find the right project to back, if you’re an investor seeking new opportunities? Ask friends and family to test it as well, and use their constructive ideas and suggestions to refine your platform.

Only if you, personally, are completely satisfied as a user can you assume others will be, too. Remember: Anything you notice is bound to be noticed by your customers as well.

VI. Develop a Simple, Straightforward Pricing Structure

In typical crowdfunding models, companies or individuals who launch a campaign receive most of the money for their innovative ideas. But the operators of the crowdfunding platform also need to cover their costs and make a profit. This is often achieved through transaction fees or an additional service fee. These fees can be charged either for each transaction or after the campaign ends. Of course, you need a pricing structure that’s easy to understand and acceptable to both your visitors and project owners, while ensuring you don’t miss out on your own profits.

VII. Offer Interesting Payment Options

A significant issue for many websites like Kickstarter or Indiegogo is that payment can only be made via credit card. For a German-based site, this can be inconvenient, as relatively few people in Germany use credit cards. Therefore, you should consider secure, fast alternatives.

Providers such as PayPal or Skrill, as well as services like Sofortüberweisung or Giropay, are excellent options for giving your customers more ways to pay.

VIII. Find Reliable Hosting

If you don’t have your own server to host the site, you need to find a reliable hosting provider. A crowdfunding site will likely generate significant traffic and involve financial transactions as well as the transmission of sensitive user data. That means the server must handle high loads, offer sufficient storage and bandwidth, and be well protected from hacking attempts and technical failures. Otherwise, you might end up facing a nasty surprise at some point.

If there’s a server outage, for instance, the crowdfunding site becomes inaccessible, rendering crowd financing impossible. Customers cannot complete their campaigns as planned, which could result in refund issues and other complications.

IX. Benchmark Against the Best Crowdfunding Platforms

Look for a ranking of the best crowdfunding sites and benchmark yourself against them. How does crowdfunding work on those platforms, and what features do they offer? What do you provide? Use this market overview to become even better and present worthwhile projects. You need to understand your competition if you want to outperform them.

It doesn’t matter whether you’re a small startup going up against an industry giant like Crowdcube. No one is perfect, and maybe there’s something about those other sites you’ve always found lacking—something you can do better.

X. Set Up Friendly and Competent Customer Support

Whenever you run a website and offer a service, issues will arise. You’ll need customer support to deal with them. This team has to be familiar not only with your platform but also with the broader topic of crowdfunding. They must understand how crowdfunding works and how it can be utilized.

When there are questions or payment problems, you must offer swift assistance. That makes professional support via email, phone, and chat indispensable. Phone support should, of course, be free of charge.

Building Crowdfunding Platforms in Germany: Summary and Conclusion

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