Crowdfunding Rating Criteria
Crowdfunding Rating Criteria
Crowdfunding, broadly speaking, is any type of funding in which a business uses a funding platform to set up a profile with the intent to solicit funds or donations from casual or serious investors. There are a variety of crowdfunding options available for businesses, including rewards, debt, equity, and donation-based options. Because crowdfunding encompasses so many types of funding, some of the below criteria only apply to a specific type of crowdfunding.
Crowdfunding is rated on the following five sections: Terms & Fees, Application Process, Sales & Advertising Transparency, Customer Service & Technical Support, and User Reviews.
Each section is assigned a rating of Excellent, Good, Fair, or Poor based on the outlined criteria. The overall score out of 5 stars is then based on the following general guidelines:
|Majority "Excellent" and "Good", no "Poor"
|4.0 - 4.5
|3.0 - 3.5
|Majority "Good" and / or "Fair"
|2.0 - 2.5
|Majority "Fair" and / or "Poor"
|1.0 - 1.5
For more detailed information on scoring, as well as how we make recommendations based on these scores, see our Rating And Scoring System.
The following characteristics warrant an Excellent rating:
Terms & Fees
- Platform fees are equal to or better than those of other crowdfunding platforms of a similar type
- Crowdfunders for personal/medical causes: only charge payment processing fees and no additional platform fees
- Rewards crowdfunders for business/entrepreneurial ventures: charge a platform fee of no more than 5%, plus payment processing fees
- Equity crowdfunders with more complex fee structures: don’t charge more than 7% – 10% of what is raised (other types of fees may come into play as well)
- Offers flexible campaign lengths
- Offers flexibility in collecting raised funds (e.g., letting the campaigner choose between all-or-nothing and keep-what-you-raise funding is ideal for rewards crowdfunding)
- Rewards crowdfunding only:
- Time from applying to campaign start is fast — preferably instant
- If pre-approval of the campaign is required to start raising money, the delay lasts no longer than a few days
- Equity crowdfunding only:
- The application process is no more onerous than that of other equity crowdfunders
Sales & Advertising Transparency
- Maintains a professional, up-to-date website that is clear, comprehensive, and easy to navigate
- The website includes full pricing and contract term disclosures
- The website is free of misleading advertising, sales gimmicks, and marketing fluff
- No pattern of complaints from merchants regarding poor sales practices
- Strong social media presence with frequent updates
Customer Service & Technical Support
- Provides multiple avenues for personalized support for funders and backers (e.g., phone, email/web tickets, live chat, active social media accounts)
- A live representative can be reached during business hours via phone or email
- Company responds to support requests in a timely manner (e.g., emails within 24 hours, phone holds and live chats within minutes)
- Support representatives are knowledgeable, courteous, and able to resolve issues
- Support department has a reputation for good service, even if some complaints exist
- Provides an extensive collection of quality online self-help resources (e.g., knowledgebase, tutorial videos, community forums, blog, etc.)
- Provides current and potential customers with status updates when necessary (e.g., application or funding progress, account status, etc.)
- The number of complaints is reasonable in proportion to company size and user base
- Complaints reference isolated, specific circumstances rather than systemic problems the company has failed to address
- Complaints are addressed publicly in a reasonable and respectful manner
- Complaints have a high rate of resolution and may include documented refunds when appropriate
- Customer feedback is taken into consideration when updating the software/service, which frequently renders older complaints obsolete
- A substantive number of credible positive reviews are available online from verifiable customers
- Receives mostly positive reviews/scores on trusted third-party review sites (and/or app marketplaces)
- Positive reviews include significant detail regarding reasons for the high rating
Note: Crowdfunders with very few user reviews receive a rating of Fair until more data becomes available.