Crowd funding is a process of raising capital through the joint effort of friends, family, clients and individual investors. It is basically sourcing of funds from the crowd and hence it is a form of crowd sourcing and is essentially the reverse of the conventional method of business finance. This approach hits into the combined efforts of a large group of individuals which is performed mostly via internet facilitated registries, though the concept can also be implemented through mail order payments, benefit occasions, and other means.
Benefits of the Crowd funding method
There are a number of advantages to crowd funding over the old-fashioned methods such as by using a crowd funding platform you can have access to thousands of certified stockholders who can see and help in sharing your fundraising campaigns. Secondly, by promoting a crowd funding campaign, you go through the priceless procedure of looking at your business level from the uppermost level that is you get a chance to see its history, offerings, value scheme and much more and then finally boiling it down to a refined and easily consumable package. Finally, one of the best things about online crowd source funding is its ability to integrate and reorganize your fundraising efforts. Everything can be easily presented online in a much handier format, leaving you with more time to run your business instead of raising funds.
Forms of crowd funding method
Crowd funding can be of various types and this method depends on the type of product, or the facility you offer and objectives for growth. There are mainly three types of crowd funding method that are based on rewards, donation, and equity. In rewards-based crowd funding, there are persons who contribute to your business in exchange for a reward, which is nothing, but a form of the product or deal your firm offers. Here, there is no commercial or equity gain. Then in donation-based crowd funding, there is a campaign in which there is no monetary return to the sponsors or suppliers. This type of funding is useful in getting funds for charities, medical bills, and non-profit institutions. Lastly, in the equity-based crowd funding, contributors are allowed to become part owners of your business organization by exchanging funds for equity shares.
Kickstarter is perhaps one of the best crowd funding sites known till now. There are other sites too such as fund anything, patreon, funderhut, pozible and much more. Crowd funding has been explored as a possible method for innovative work such as journalism, blogging, start-up companies and much more. Crowd funding is more efficient than outdated fundraising and helps to gain you, early adopters and faithful benefactors.