Crowdfunding: how to choose the right platform for your small business

For many London entrepreneurs, finding finance is one of the biggest challenges when starting or growing a business.

Many founders begin with limited capital, relying on personal savings or income from another job before seeking funding from outside.

Crowdfunding has become an increasingly popular way for small businesses to raise money, but choosing the right platform can feel overwhelming.

Your choice affects how you present your business, who you reach and what supporters receive in return, whether that's a reward, shares in your company or the opportunity to support a project they believe in.

The good news is that understanding the different crowdfunding models makes choosing a platform much easier.

With the right preparation, crowdfunding can help you raise finance, test demand, build an early customer base and gain confidence in your business idea.

Start with your goal

Before comparing platforms, think about what you want to achieve.

• Launching a product? Reward-based crowdfunding is often the best option.

• Looking for investment? Equity crowdfunding helps businesses raise growth finance.

• Supporting a community project? Donation crowdfunding may be the right fit.

• Looking for finance while keeping ownership? Crowdfunding loans can offer an alternative route.

Starting with your goal makes it much easier to choose a platform that suits your business.

What is crowdfunding?

Crowdfunding raises money from a large number of people through an online platform.

Rather than relying on a single investor or lender, businesses receive smaller contributions from many supporters.

Depending on the model, supporters may receive a product, shares in your business, loan repayments or simply the satisfaction of supporting a cause.

For many London founders, crowdfunding offers more than finance. It can also help validate demand, attract early customers and build awareness before launching a product or expanding a business.

Further detail on how crowdfunding works is available via Grow London Local.

The main crowdfunding models

Reward crowdfunding

Supporters receive a product, service or exclusive reward in return for their contribution.

This model is popular with businesses launching new products because it helps generate sales while testing customer demand.

Equity crowdfunding

Investors receive shares in your business in exchange for funding.

This option is often used by startups and ambitious founders looking to grow while building a community of investors.

Donation crowdfunding

People contribute because they want to support a social, charitable or community project, without expecting a financial return.

Crowdfunding loans

Some platforms connect businesses with investors willing to provide loans that are repaid over time. This allows businesses to access finance while retaining ownership.

Choosing the right crowdfunding platform

Different platforms attract different audiences and suit different business goals, so it's worth comparing your options before launching a campaign.

Consider the following:

• Funding model: choose a platform that matches your objective, whether that's rewards, investment, donations or loans.

• Fees: most platforms charge a percentage of the funds raised, as well as payment processing fees. Make sure you understand the costs before launching.

• Audience: some platforms are aimed at consumers looking for exciting new products, while others attract experienced investors or lenders.

• Support: many platforms offer campaign guidance, promotional tools and onboarding support, which can be especially valuable if it's your first crowdfunding campaign.

• Effort required: crowdfunding isn't a "set and forget" exercise. Successful campaigns require planning, regular updates and ongoing promotion to maintain momentum.

Popular crowdfunding platforms

If you're not sure where to begin, these recommendations can help:

• Launching a product: Kickstarter

• Looking for flexible reward crowdfunding: Indiegogo

• Seeking investment: Crowdcube or Seedrs

• Looking for business finance: Crowd2Fund

Kickstarter is one of the best-known reward crowdfunding platforms and is ideal for launching innovative products.

Indiegogo also supports reward-based campaigns but offers more flexibility, including funding options that allow businesses to keep money raised even if they don't reach their target.

Crowdcube and Seedrs (Republic Europe) specialise in equity crowdfunding, helping businesses connect with investors seeking long-term growth opportunities.

If you're looking for an alternative way to access finance while retaining ownership of your business, Grow London Local works with Crowd2Fund, which connects businesses with retail investors through crowdfunding loans.

Remember, there isn't a one-size-fits-all solution. The right platform depends on your business goals and the audience you want to reach.

Is crowdfunding right for your business?

Crowdfunding works best when you already have a clear business proposition and are prepared to promote your campaign.

You usually have the strongest chance of success if:

• Your product or service is easy to understand.

• You've already generated some customer interest.

• You have an existing audience through email, networking or social media.

• Your funding target is realistic.

• You're ready to actively promote your campaign throughout the fundraising period.

London offers significant advantages for crowdfunding. Its large customer base, thriving startup community and active investment ecosystem provide excellent opportunities to connect with potential supporters.

At the same time, competition is strong, making careful preparation even more important.

You should also consider crowdfunding alongside other funding options rather than as a standalone solution.

Preparing for a successful campaign

Before launching, take time to prepare.

• Build an audience before your campaign goes live by engaging customers through email, networking events and social media.

• Set a realistic funding target based on what your business genuinely needs.

• Tell a clear story that explains what your business does, why it matters and how the money will be used.

• Finally, plan how to promote your campaign throughout its duration. Regular updates and communication help maintain momentum and encourage new supporters.

Conclusion

Choosing a crowdfunding platform isn't simply about where to host your campaign.

It's about finding the platform that best matches your business goals, your audience and the type of support you're looking for.

With the right preparation and platform, crowdfunding can help London businesses raise finance, build credibility, test demand and create valuable early momentum.

Taking time to choose the right option now can give your campaign – and your business – the strongest possible start.

Read more

• Grow London Local Money – explore funding options and build strong financial foundations for your small business

• Short-term finance: what to use and when to use it

• How to fund your business: a guide to capital for SMEs

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