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.