Hosted Versus Self-Hosted Crowdfunding. Which is Right for You?

When it comes to Crowdfunding, there’s an ever-growing list of viable platforms available to you—many of these platforms have niches such as real estate crowdfunding, donation crowdfunding, equity crowdfunding, and more.

Whatever the niche you decide to build a Crowdfunding Platform for, you’ll eventually need to choose where you want to build your platform. The choice typically comes down to hosted or self-hosted, and where you decide to go is ultimately driven by how technical you are, how much control you want, and what custom functionality you need (if any at all).

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Which Solution is Right for You?

Over the last decade, there has been a staggering proliferation in the number of Crowdfunding Platforms. Kickstarter, SeedInvest, and StartEngine are a few that come to mind in this space. Each of these is known as Hosted Crowdfunding Platforms.

Hosted Crowdfunding Platforms are an excellent choice for entrepreneurs and organizations who want to jump right in, focus on the core campaign concept, and get down to raising funds and promoting their projects.

While there may be more hoops to jump through to verify income, identity, the validity of the concept, and the ability to follow through—Hosted Crowdfunding Solutions tend to present a lower barrier to entry for most.

What is a Hosted Crowdfunding Platform, and Why Would One Want to Use One?

Hosted platforms mean that the technical side of things such as web hosting, application updates, maintenance, and support are all managed by the Hosted platform provider. This means fewer technical headaches for the end-user/customer.

There are generally more hurdles to navigate with a hosted, all-in-one solution. However, platforms like StartEngine also have additional checks to ensure the financial viability of those who use their platform to raise funding, thus ensuring more robust protections for potential backers and investors.

Enhanced Verification

Using a Hosted Platform means you’re subject to that platform’s terms of use. When starting up a Crowdfunding Platform on a Hosted service, one big difference is that you have to verify your financials, business, and personal identity to ensure the security of that platform’s users.

This isn’t a bad thing; it just takes a little time. However, ensuring you’re building trust right from the start is well worth the wait.

Support When You Need it

Knowing that there is dedicated support staff available when you run into a question or technical hiccup makes a hosted solution more attractive. After all, we’d rather spend time building and running a solution rather than getting underneath the hood and troubleshooting bugs, right?

This solution is also great if you don’t have a technical team backing you up in your efforts. Thus, less technical overhead and less expertise are required.

Easy to Use

Ease of use is subjective—often, hosted platforms invest a lot of money and time into ensuring a great user experience, which often comes at the expense of utility and functionality. Easy-to-use systems should be, well, easy and not complicated. Advanced features and controls are not implemented for adoption and customer satisfaction, resulting in a less flexible platform than you’d find in a self-hosted solution.

Managed Security

Again, you don’t have to manage the technical aspect of your platform. Thus, the security part of the equation is also collected for you by the platform provider. It’s up to you to use a strong login username and password.

Why Might Someone Choose a Self-Hosted Crowdfunding Platform?

Self-Hosting your Crowdfunding Platform means taking full ownership and responsibility for the care, maintenance, and ensuring the functionality of your platform. This can be a daunting task for the lay user but if you have the patience and willingness to learn, then Self-Hosting your platform potentially provides many more benefits than a Hosted Platform.

Crowdfunding with Bitcoin

IgnitionDeck is one of the more popular Self-Hosted, White-Labeled Crowdfunding platforms available. The latest release of IgnitionDeck includes full support for crowdfunding platforms to accept Bitcoin payments. Platform Owners can collect an optional (and variable) fee from Project Creators when Backers make their payments with Bitcoin through the new CoinPayments module introduced in Version 1.6.6 of the IgnitionDeck platform. And you can’t do that with most Hosted platforms. We offer flexibility.

You Own the Platform

With a Self-Hosted solution, you can choose what types of Crowdfunding you do and what kinds of projects you and your creators support. Hosted platforms can change their terms of service; sometimes, your projects could be shuttered without cause or notice. S

elf-Hosting your platform ensures that you maintain complete control over every detail of your Crowdfunding Business.

Your Branding, Your Way

One of the compelling reasons to host your Crowdfunding Platform is that you have complete control of the overall look and feel of your website and checkout process.

Additionally, should you want to add custom functionality to your website, you can customize aspects of your platform.

Branding may or may not be a central focus of your Crowdfunding Campaigns. However, if you’re running a Crowdfunding Platform with the sole purpose of running it as a viable business, then Image is Everything, as Andre Agassi taught us in the 90s.

Branding can enhance the user experience and help bolster your reputation, leading to more users signing up for your platform.

Access to Critical Marketing Data

Host platforms often keep critical marketing information hidden from their project creators, most important emails. However, not being able to email your backers is a considerable obstacle to building a viable Crowdfunding Business.

When you self-host your Crowdfunding platform, you have access to every piece of marketing information your backers provide within their transactions. With that data, platform creators can more effectively build their businesses and appropriately target their audience.

No Lengthy Approval or Vetting Process

When you own the platform, you are not subject to lengthy review periods or vetting processes, and that’s good news for platform creators. It means that you can get started on building and marketing right away and put that time that would have been spent on venting into developing, marketing, and building your Crowdfunding Business

No Platform Fees

Most platforms take a transaction fee on each transaction to the platform. These transaction fees can range from 3% – 15% depending on the particular platform that you are using. When you own the platform, there’s no other platform to pay, just your bank account! This leads us to…

Fee Splitting

The concept of Fee Splitting or Fee Mods is that a platform creator can apply fees to their Crowdfunding Transactions at checkout. This is a compelling feature for project creators as it allows them to build a business on their Crowdfunding Platform. Creators can reclaim fees from payment processors and cover their expenses for managing the tech stack for their business.

This is a popular Crowdfunding feature of IgnitionDeck (get started).

How to Build Your Self-Hosted Crowdfunding Platform

We’ve plastered it all over this website, and in case you didn’t know by now, IgnitionDeck is one of the best Self-Hosted Crowdfunding solutions available. It’s Open Source, and you can start for free. That means that you can download and customize IgnitionDeck to do whatever you need it to do.

If you’re really going to do this, we recommend you purchase IgnitionDeck Enterprise, as that unlocks all of IgnitionDeck’s powerful Crowdfunding Features.

Get a Solid Web Host

There are several Web Hosts you can build your platform on. And they offer as much control as you’re willing to pay for.

We recommend the following web hosts:

Lower Budget Hosting Options

• SiteGround
• Bluehost
• Dreamhost

Managed WordPress Hosting

• WP Engine
• Pantheon

If you’re comfortable rolling your own VPS…

• SpinupWP + Digital Ocean or AWS or Linode
  SpinupWP is just the glorified (and very useful and easy to use) management console GUI that helps you manage your VPS servers. This option is a little less expensive, but you have complete control over the server.

Getting Help

Building out your own Crowdfunding Platform is serious business. If you’re not technical or experienced in building things for the web, this is a daunting route with a steep learning curve.

Fortunately for our customers, we have a robust and helpful Crowdfunding Knowledge base to help you get started along this journey. You can also hire the IgnitionDeck team to do the work for you. Our Valet Service ensures your Crowdfunding Platform gets off on the right foot from the very start! If you need something custom that IgnitionDeck doesn’t provide, you can hire our team for custom development!

You can find solid freelance development help on FreeUp or Upwork. We recommend finding a professional with ample WordPress experience who can demonstrate a strong portfolio of work and talk through their process and approach to a project. We’re big fans of Codeable ourselves, which is a WordPress-focused freelancer marketplace.

Final Thoughts

Choosing a Crowdfunding Platform to run your business from is deeply personal and many factors affect your decision making process.

Be clear and honest with yourself on what your technical aptitude is. Get help where you need it and niche down on what kinds of Crowdfunding you plan to support. Choose your platform, go forth and enjoy the ride.

If you ever need help, reach out to the team here at IgnitionDeck any time.