5 Top Crowdfunding Platforms in South Africa
Entrepreneurship provides the goods and services a community needs. It also creates jobs for the local economy. Starting your own business is exciting, especially if you are passionate about it. It is true in South Africa where purpose-driven entrepreneurship flourished in recent years. The Global Entrepreneurship Monitor (GEM) reported that 1 out of 8 South Africans can be an entrepreneur.
But how can you be an entrepreneur in a country with declining living standards and worsening income inequality? Two years of the COVID-19 pandemic caused more than 2 million South Africans to lose their jobs. It begs the question – how can you fund your capital to start your business?
Crowdfunding your Business Capital
Crowdfunding is an innovative way for entrepreneurs to raise money by asking others to contribute funds towards their business idea. It has become popular over the past few years, and there are now many platforms where you can crowdfund projects.
Each platform that we introduce here has its unique feature. You must understand what each one offers to decide which one will make your business successful.
Equity Crowdfunding
Equity crowdfunding allows supporters to invest in the shares and receives a share of the profit from an entrepreneur. It is the best form of crowdfunding for small to medium enterprises (SMEs) who need help raising capital. But, the nature of equity crowdfunding involves investment in a commercial enterprise. Thus, it is subject to securities and financial regulations. So if you are up for this challenge, here are two crowdfunding platforms in South Africa you may check out:
No. 5 Uprise.Africa
Uprise.Africa is an assisted equity crowdfunding platform. They will help you with your business pitch and take care of the necessary documentation for your business. They make sure entrepreneurs and investors are safe from risks and can make informed decisions on their investments. The service is quite promising but be aware of the fees to be deducted on the raised investments – ranging from $1,500 (R25,000) to $4,500 (R75,000) excluding taxes.
No. 4 Livestock Wealth
If you are a farmer or want to be one, Livestock Wealth could be for you. The equity-based Crowdfarming™ platform connects farmers to investors where both parties benefit. The platform has been operating for more than seven years. They have expanded their portfolio assets from free-range ox and cows to vegetable farms to macadamia nut tree farms. Livestock Wealth also provides market, health, and technology access to farmers. It will help farmers sustain their farm operations.
Reward-Based Crowdfunding
Reward-based crowdfunding allows entrepreneurs to provide first-hand experience of their big idea with investors and/or possible first customers through donations. The business owner will send you a sample product or any reward in exchange for your support. So if you are starting a retail business, you can crowdfund for your business capital via this method where you can product test simultaneously. Thundafund is an example of this type of crowdfunding platform in South Africa.
No. 3 Thundafund
Thundafund boasts itself to be Africa’s leading crowdfunding platform. They initially opened their platform for creators and innovators alike. They expanded to more project creators through their years of operation. But, one needs to be aware of the all-or-nothing clause that Thundafund has. Projects are required to raise a certain amount of money before their project closes to receive the funds. Otherwise, funds are forfeited and will be refunded back to the supporters. So if you are joining Thundafund, make sure you have a great idea that sells to reach your fund goal.
Donation-Based Crowdfunding
Donation-based crowdfunding is the most popular form of crowdfunding around the world. It allows anyone to raise money for different purposes without the need to return the funds received. (Good news for entrepreneurs!) Percentage fees are deducted from the fund pool to pay for the operating expenses of the company. There are two platforms under this category available for South Africans.
No. 2 backabuddy
BackaBuddy is a South Africa-based crowdfunding platform open to any fundraiser in the country. If you are advocating for a positive impact on an individual, a community, or the environment, you can start fundraising here. It is also open to registered non-profit organizations that need financial assistance for their advocacy. However, project creators must note that raised funds are processed monthly on the 10th day of the succeeding month. If your project ended on the 16th of the current month, you would have to wait 24 days to receive your funds. Funds are subject to 7% + VAT fees.
No. 1 Airfunding
Airfunding is a donation-based crowdfunding platform operating in 18 countries including South Africa. More than 650,600+ individuals worldwide have trusted Airfunding to help them in their financial goals.
✔ Stronger together. Airfunding is not only a crowdfunding platform but a community of individuals who want to help where help is needed. The platform has 135,700+ supporters worldwide willing to lend a helping hand to anyone in the Airfunding community. It is a potential for you to receive investors immediately for your business idea.
✔ You are in control. Project owners have the freedom to do what they will for their fundraising project in Airfunding. As an entrepreneur, truly, you want this. You can tell your business pitch the way you want to, set how much capital to raise, and how long will the fundraiser be. The Airfunding Customer Support team is available 24/7 to help you out.
✔ Beyond business. Airfunding is not only for business owners. Anyone with a dream or financial need can create a project in Airfunding. Fundraise for medical bills, education, or travel – really, anything! The stories of South Africans Ts’oloane Ntsane (raised R 24,153.47 for chemotherapy), Chantelle Strauss (raised R 16,416.42 for her dream to fly a plane again), and J.C Geldard (raised R 9,258.00 for health recovery) are just some inspirations we can share with you.
Make your South African business dream come true today!
Investors around the world are looking for ways to increase their portfolios. Start an Airfunding project today and let them know your great idea. You can even include your Airfunding project page link to your business presentation or website for a seamless donation experience for your supporters. Get started on your entrepreneurial journey now.