Crowdfunding Platforms Raising Money For Common Interests

Crowdfunding is a term which describes a group of individuals who come together to fund and support projects initiated by organizations or other individuals. It supports the concept of there being power in numbers. Money and resources are pooled together usually by means of online fundraising. Crowdfunding can benefit a variety of causes and creative works including political campaigns, charity fundraising, start up companies, artists, and independent film makers. Social and commercial entrepreneurs are finding it easy to connect groups of investors sharing their common interest, allowing them to secure donations from parties wanting to contribute to their cause at a low cost.

There are three separate ways individuals or organizations can get funding through means of crowdfunding. They include; donations or pledges, lending and investing. Crowdfunding for a non-financial return consists of pledging money to a cause or project by means of donation, sponsorship, or philanthropy. In return supporters receive non-financial acknowledgement for their patronage. One of many popular crowdfunding websites that act as a funding platform for these projects is kickstarter. Kickstarter professes to be the largest funding platform in the world today. Creative projects must be fully funded before the funding period expires otherwise all monies are returned to those who have contributed. Project creators maintain 100% control and ownership over their unique project on Kickstarter.

Crowdfunding for a financial return through P2P (peer to peer) lending is another option of funding. These platforms provide an opportunity for people to invest in debt for entrepreneurs and start-up companies. By omitting the middleman lenders receive higher returns, and borrowers pay out a lower rate. Lenders usually control their level of risk and return. It is recommended to ensure there is a plan in place to service the loans in case it ceases operation.

The final means of funding is crowdfunding for equity with the potential of ownership and financial return. This web start-up concept challenges traditional business providing different advantages for both entrepreneurs and investors. These platforms enable direct investments from investors to be taken in, and direct returns on those investments in a company to be paid out. These platforms allow entrepreneurs to describe their investment opportunity and people to become investors in these opportunities for very little money. Investors can fund a small amount of money or a large amount. The decision lies in their hands. Crowdfunding for equity in a company online is currently not an option for companies in the United States. Rules created eight decades ago by the Security and Exchange Commission prevent it, however there are currently efforts in place to get this changed, and it will likely be available in the future.

Also known as crowd sourcing, this community propelled process allows individuals and organizations to create something new and supplies supporters a meaningful way to contribute to something they are passionate about or interested in funding. It gives good ideas, which are not of interest to conventional financiers, the chance to attract resources through the interests of the crowd. Projects are able to receive promotion from word of mouth amongst people sharing the same interests. The web has the ability to organize communities simplifying interaction between those with a common goal. It also provides a forum of feedback. It is a relatively inexpensive way of raising funds. Concerns surrounding this funding choice include disclosing ideas at an early stage before they are properly developed. This exposes a unique idea to the public by placing the concept in an environment where it may be copied. A competitor with more solid financing may be able to develop the idea quicker. There is often a cap on how much a project is capable of raising.

Entrepreneurial projects are noticed and funded much more easily due to the worldwide rise of platforms. It is essential to find the right site for your business or creative idea. Setting a realistic goal and target time in which to raise funds is equally important as locating the right atmosphere in which to present your project. Too little of an amount can result in failure to secure the proper funding to make your vision a success. Creating a personalized campaign video and keeping supporters informed and engaged can create some momentum of interest which will benefit the project. Crowdfunding is becoming a popular business. It has created a healthy atmosphere for those interested in creating a platform to fund ideologies or jump start their next project.