The use of crowdfunding apps has completely changed the way that startups, small businesses, and nonprofits can collect funds for their projects and support their causes. These platforms serve as a meeting spot for those who want to secure funding for their projects and for people who might be interested in investing in them from all over the world. Whether it’s entrepreneurs seeking startup capital or individuals pursuing projects like creating the best-funded trading accounts, crowdfunding apps have opened up new pathways for financing. The rising popularity of crowdfunding apps has prompted a very powerful competition in the market, putting more emphasis on app developers to produce refined, fully functioning apps that are consistent with the various crowdfunding types. In this article, we will delve into the world of crowdfunding apps, exploring what they are and the key features involved in building one.
A Brief Overview of the History of Crowdfunding
To explore the rich history of crowdfunding, we have to hop on our time-traveling ship and go back in time, like, way back. So, let us get started! The idea and concept of crowdfunding date back to the 1700s. Yes, it is that old. For instance, let us go back to London in exactly 1713. We would find Alexander Pope, the renowned English poet and translator. He had some trouble translating the Iliads, given that it would cost a lot of money and effort. Alexander would then try to raise money from the aristocrats to fund the translation process, which he would successfully do.
Moving to 1783, the popular and crowd-favorite composer, Mozart, decided to go on tour and allow people from different regions of the world to enjoy his exceptional and one-of-a-kind pieces. Well, the “tour” was three concerts in the Vienna concert hall, but still, it is Mozart! Mozart couldn’t afford to do the same thing that he has done previously, which is travel and perform concerts. Since Mozart was globally loved, he had fans all over Europe; some were people in authoritative and powerful positions. These fans were able to fund this tour with a total of 176 funders.
The Rise of Digital Crowdfunding
Now enough with going way back in time, and let us narrow down the trip. The year is 1997, with yet another tour and music-related fund At this time, the band Marillion was so in, people were obsessed. The band had trouble going on a US tour, but their loyal fan base had another opinion. Now this was the first try and form of online crowdfunding that paves the way for more to come. Through an online campaign and crowdfunding, the fans were able to raise over 60 thousand dollars and bring their favorite band to the US.
Since then, the concept of digital crowdfunding has become more popular since it proved to be much easier and more efficient. Additionally, the first crowdfunding platform, ArtistShare, was launched in 2003, and many came after.
What Are Crowdfunding Apps?
A quick fun fact! The term crowdfunding didn’t become popularized or standardized until 2006, which is many years after the establishment of the concept itself. The term comes from the idea of being supported or funded by the crowd or fans, as it happened on multiple occasions, as we discussed in the previous section. Crowdfunding apps are platforms where individuals and organizations can fund a specific project or cause financially. In contrast, individuals and organizations could also establish a cause or project and ask people from around the globe to support them.
Types of Crowdfunding Applications
If you think that crowdfunding apps are only limited to supporting musicians to tour in countries where they initially started, you are totally wrong. There are now a great number of crowdfunding apps in many types and forms. Without further ado, let us explore some of the most important and common types.
Equity Crowdfunding
Using equity crowdfunding, individuals can invest in businesses in exchange for a share of ownership. In order to get their feet off the ground, startups and small businesses frequently use this method. Seedrs and Crowdcube are two examples of platforms and applications focusing on equity crowdfunding.
Donation-Based Crowdfunding
Donation crowdfunding is a type of fundraising that involves supporting specific businesses, projects, and individuals financially. Donation crowdfunding relies on monetary contributions from the general public without the promise of any specific return. It’s commonly used to pay for disaster relief, medical costs, and charitable donations. GoFundMe and JustGiving are two of the most popular donation crowdfunding platforms and applications that millions of people use.
Debt Crowdfunding
Debt crowdfunding, also known as peer-to-peer (P2P) lending, is the method by which people make loans to either other individuals or businesses with the expectation of receiving interest in return. This type of crowdfunding has received much recognition in the past few years and continues to prove its effectiveness. LendingClub and Prosper are two well-known examples of such applications that you can find on the Apple App Store and Google Play Store.
Non-Profit Crowdfunding
Non-profit crowdfunding is probably the most popular type of crowdfunding application, as a large number of people and organizations depend on it to a great extent. These platforms were developed with non-profits in mind and are used to collect donations for good causes. Causes and Kickstarter are two popular non-profit crowdfunding platforms used by nonprofits and charities.
Creative Crowdfunding
Crowdfunding platforms in the creative sector are designed specifically with artists, musicians, writers, and other creative creators in mind. Such platforms include Patreon and Drip, two examples that have been greatly used by many people. Patreon alone has more than 8 million users, including both supporters and creators.
Importance of Crowdfunding Apps
Accessibility
Accessing funding from a worldwide audience is now much simpler, thanks to crowdfunding apps. In this way, everyone has an equal chance to get their ideas and projects funded, regardless of where they are or their connections.
Diverse Funding Sources
With the help of crowdfunding apps, people can raise money from a wide variety of people who may or may not know each other but who all share an interest in the same project. This variety of funding sources lessens the company’s reliance on investment firms and banks.
Innovation and Entrepreneurship
Crowdfunding apps encourage creative thinking and entrepreneurship by giving people a place to show off their ideas and creations. This can result in the creation of novel goods, services, and companies that would not have otherwise been funded.
Community Building
Using a crowdfunding app can unite people behind a common cause or inspire them to create something new. Contributing to a cause one believes in gives backers a sense of accomplishment and satisfaction, which can inspire continued dedication and support.
Market Validation
Crowdfunding apps can be used as evidence of the market’s recognition. When there is a lot of interest in a product or idea on a crowdfunding platform, that usually means there is a market for it. That is why people who want to start businesses or create new products may find crowdfunding apps invaluable tools.
Fundraising for Social Causes
Funds for good causes can be easily raised through crowdfunding apps. Medical costs, disaster relief, school supplies, and other causes can all be supported by funds raised through these channels. This facilitates direct individual involvement with causes that matter to them.
Reduced Barriers to Entry
There are usually significant obstacles to entry into traditional fundraising, such as the need for an established network and a proven track record. Crowdfunding apps lower and even eliminate these barriers, making it simpler for underrepresented groups and newcomers to gain access to financial support.
Global Reach
Crowdfunding apps’ global reach facilitates communication between creators and funders from all over the world. When projects gain international attention, they can gain more attention and support from people all over the world. Therefore, it helps increase awareness of underrated creators.
Transparency and Accountability
Accountability and openness are two key features of many crowdfunding apps. Creators of funded projects are often obligated to keep their donors informed of the progress of the project. Therefore, creators and backers can gain trust from each other in this way.
Top Features of Crowdfunding Apps
User Profiles
User profiles are extremely important when developing crowdfunding applications. It is essential to provide users with a space where they can introduce themselves to others in any way they would like, either fun, professional, etc. For instance, such a feature would be a must in creative crowdfunding applications since artists and creative creators have to find a place where they can demonstrate themselves and their work for people to learn more about them.
Secure and Seamless Payment Systems
Since crowdfunding apps are all about giving and receiving, implementing seamless and secure payment systems is a major part of this process. Users always love having more than one option; this gives them a bit of flexibility and room to choose whatever is suitable for them. That is why incorporating more than one payment option is very important for an effective crowdfunding development process. Additionally, developers have to make sure that these payment options and systems are secure and guarantee the maximum level of safety for users.
Social Features
It is nice to have something other than a profile to express opinions and connect with others. This can be easily accomplished by adding social features like newsfeeds, groups, and even channels. These can be a great addition to any application, not just crowdfunding apps. Through this addition, people can connect with each other and discuss different topics and causes.
Campaign Dashboard and Management
Campaign dashboards and management are two of the most important features that need to be found in any crowdfunding application. Through this feature, users can control their campaigns and manage them entirely. They can see all the insights, such as impressions and incoming donations, to always be updated with the recent updates on their campaigns.
Multiple Customer Support Features
With the large number of people who might use crowdfunding apps on a daily basis, some problems may arise. Therefore, the presence of multiple customer support features is a must. Multiple customer support features, such as AI-powered chatbots, live chat, and forms, can be pretty beneficial. Users can seek assistance from anywhere they’d like, anytime they want. In addition to elevating customer satisfaction, this also enhances the crowdfunding app’s functionality.
Is No-Code Developing a Good Choice for Creating a Crowdfunding App?
We all know the drawbacks of any app development process. Although the results would be very effective, it also requires much effort, time, and money to ensure such results. That is why going through an app development process is somewhat difficult for small businesses and organizations. Luckily, some other solutions came to light in the last few years and became a constant go-to for individuals and businesses. This solution is no-code development.
As you might have an idea about no-code development, let us ask a better question: Are no-code development platforms capable of creating crowdfunding apps? The answer is definitely yes! The rate at which no-code platforms are progressing and advancing is exceptional, which increases their potential and capabilities. For instance, a platform like nandbox has a rich list of features, including social features, payment systems, API integrations, customer support features, and many more. These alone are more than enough to develop the best crowdfunding app.
Taking a step into the world of app development is difficult, yet very attainable. Crowdfunding is not a popular category at the moment, but it is witnessing a major incline. Now is your chance to enter an upcoming, thriving market and take a step into prosperity.
