Companies using Fundable have a choice between a Rewards or Equity model. This option allows businesses to choose which model will work best for their specific fundraising needs. This is rare in the crowdfunding world where crowdfunding models are typically pre-determined. A successful Rewards raise can be a great foundation of support for a subsequent Equity raise.
Rewards-based campaigns allow startups to provide an item of value in exchange for a monetary pledge. For example, if a Backer commits $100, the startup may offer a copy of the product once it’s produced (like a pre-order). Rewards-based raises do not offer any equity (company stock) to Backers and are best effective for smaller dollar raises (typically below $50,000). Typically, a startup will rely on commitments from current customers, personal support from their social network, or do-gooders—making it a better choice for smaller funding goals.
Equity campaigns allow startups to make a pre-determined portion of the company available in exchange for capital. This model type is most effective for funding goals of more than $50,000 by companies looking for larger sums of operating capital to move their business forward.
Fundable charges users a monthly fee of $179/month to create and manage your fundraising campaign. Pricing is not pro-rated. While it’s true that larger companies may hardly notice this fee, it could be a pretty steep amount to pay for companies just starting out.
For Rewards-based campaigns, funding is by credit card using a third party processor called WePay, requiring a fee of 3.5% + 30¢ per transaction. Although some crowdfunding sites for startups don’t charge monthly fees, they charge completion fees and non-completion fees. Fundable charges no completion fees or partial fees. This means that users are not charged an additional fee upon completion of their fundraiser, and there is no additional fee for failure to meet a goal. This is a benefit because less fees is more cost-effective and it allows users to take home everything they raise.
Maximum Allowed Raise
Fundable does not have a specific cap or maximum amount of how much you can raise. They recommend $50,000 max if you’re using the Rewards model and anything $50,000 and over if using the Equity Model.
There is no minimum or maximum duration for fundraising with Fundable. With Equity fund types, an investor’s commitment will need to be renewed every 90 days. A typical Equity fundraiser is at least 60 days. The average Rewards-based fundraiser lasts 60-90 days.
How funds are received depends on the funding model you choose. At the end of your Rewards campaign, all funds are automatically collected and transferred to the your Startups’ or business’ bank account. For your Equity campaign, all commitments are processed offline after the close of fundraise.
Administrative Work Options
Fundable’s team takes a very hands-on, step by step approach—from profile creation to marketing—to help companies understand the fundraising process and launch their funding campaigns. Whether creating a profile or revamping a marketing strategy, a member of the Fundable team is there to offer assistance. This approach is delivered based on the fact that the founders of Fundable have much personal experience raising money and are familiar with the process. Therefore, they are able to offer personal expertise to their clients.
Administrative assistance from Fundable comes in the following ways:
- Profile Page Creation Wizard: A step-by-step Profile Creation Wizard that lets you showcase your company and begin sharing your fundraiser page with friends, family, colleagues, customers, and the media in a short amount of time. Newly created profiles are reviewed by the Fundable team to make sure that they are a good fit for the platform.
- Impressive, helpful tools they provide their users: Guides are offered and contain the best practices for starting and growing a company and advice from the country’s top entrepreneurs and investors. Well-designed infographics are added monthly to help simplify seemingly complex ideas and processes. These tools are great for visual learners and makes important topics much easier to understand. There is also a section available for users to read other startup stories and learn how some of America’s most notable companies got started. Chipotle, Pinterest, Amazon, 5-Hour Energy, and Under Armour are some of the start up stories available on Fundable’s site.
Fundable uses an “all or nothing” fundraising type which applies to both Rewards and Equity models. All or Nothing means your startup or business must meet or surpass your goal in order to successfully collect funds. As frustrating as this may be for entrepreneurs, it actually makes sense in this type of circumstance; investors only want to contribute if they are sure their money can be put to good use and assist with company expansion.