Often when I see open source companies I notice one of their sources of funding is crowd funding? My question is why is this?
Are there not any better methods of income that they could use?
Why is crowdsourcing used? It works pretty well. Open sourcing something nearly always means a community that is interested in it. So it can work that the community is enthusiastic enough to fund the open sourced thing through crowdfunding.
But there are a lot of other methods for making money. My examples for these methods are non-companies, but companies can make money with these methods as organization or persons can.
Most open source projects have a donate button or something similar. That is not far from actual organized crowdfunding. Some project make fundraisers at some times, Wikipedia does from time to time for instance.
Some classic open source projects release the open sourced software, but offer paid services around it: support, documentation, installation and configuration help and so on.
Some projects sell premium versions of the product. That is common for open books or music, digital is free, a printed version or a CD cost something. A way Cory Doctorow makes his money.
Merchandise is another way of income for an open-source-project. Selling coffee-cups, T-shirts, Posters, mousepads and so on with the logo of the project can bring a lot of money. XKCD finances itself mostly with merchandise.
Why might open source companies use crowd funding?
First, what is an open source company? In this context, I presume it means a company that develops and distributes open source software. Red Hat is considered to be a well know Open Source company, right? Canonical (of ubuntu fame) is another. But, does it end there? Google is an open source company by that definition (android, angular, and thousands of other things are open source... right?) So is IBM (eclipse, OSGi, parts of Java, parts of it's Z-OS code, IBM donated much code to Apache, etc.). Microsoft is Open Source - it's opening the .net platform, etc.
I presume, at this point, that you are starting to disagree with me.... how can Oracle be an open source company - it does own MySQL and distribute it, though... so, it qualifies - even Java is open - and that's Oracle.
This concept of an open source company is broken.
Should the concept be narrowed? An open source company cannot sell closed-source products? Well, there goes RedHat, Pentaho, Mandriva, SuSE, Canonical, etc. All the posterchilds are gone... leaving things like.... Apache, Eclipse, hmmm, not much else.
Then again, those are not companies, they are non-profits, or foundations...
What is crowd funding? Kickstarting is crowd-funding, but, it is actually an investment, and a contract. A kickstart campaign is a pre-order with a specified delivery, and a penalty if it fails. It is not exactly a donation. This sort of seed money is a common thing to do, and is a form of distributed venture-capital. A lot of people invest, and they have preferential returns on that investment (early/cheap access to cool things).
Kickstarting is crowdfunding, but it is almost always associated with something tangible, a book, a device, a bowl-of-soup, or whatever. Not software.
Further, companies have complicated rules about accepting donations (but not so complicated when accepting investments or pre-orders). Companies are not charitable organisations, so they can't just say "donate here" without first making it clear that they are "for profit", and they cannot (in the US, at least) issue tax benefits, etc.
On the other hand, individuals, and not-for-profit charitable organizations can accept donations (like Mediawiki, EFF, OSI, Apache, Eclipse, etc.). Then again, they are not companies.
Most companies who's primary business is related to open source software distribution (like RedHat, Pentaho, SuSE, Canonica, Elastic, etc.) make their money (and profits) from value-add - whether it be support, a premium experience, an enhanced management system, better scalability, or whatever.
Where they don't make their money primarily from that, they make it from advertising, selling space on their pages.
Individuals and non-profits. It is easy to throw up a "donate" paypal button. But, you should be aware, that most of those people get good value from advertising too, and also from esoteric things like "wishlists", commissions, contract-work, and so on. If you are the lead developer on an open source project, you will likely be the person contracted to apply a custom hack for some company, or train people, etc. It is not a direct payment, but indirect.
Or, you become an "evangelist" at Google, etc.
No company makes significant money from crowd funding.
Individuals and non-profits may, but there is no reason to believe it is significant... the bulk of value comes in from being able to put it on your resume, and selling your knowledge and skills, not your product.