Crowdfunding Solution similar to Kickstarter
Crowdfunding solutions are making its role in the society. For money investments, of the various investment plans, crowdfunding is one of the best for getting fund for business growth. In the earlier days, business firms need to search for investors and need to visit banks for the approval of the loan. Bu now, scenario has entirely changed, the hunt for investors can be replaced by crowdfunding platforms. Crowdfunding refers to collection of small amount of funds from a large number of people.
Crowdfunding
Talking to the meaning of Crowdfunding, crowd means people, organization or business that provide funds for business and in return of which they are given some amount as profit. Crowdfunding also refers to the collection of funds from family, friends, customers, investors and individual through online.
On crowdfunding websites, business person will post the respective project details and the fund transfer to this project can be done through online. This helps in saving time for finding the investors.
As per survey, the growth of crowdfunding platform is on raise year by year. Its highest was seen in 2015 and has grabbed the viewers’ attention. The ratio of 2012-2015, then in 2014, it is 16.2 billion US dollars was raised in crowdfunding. In 2015, it hit the market by 2.56 billion US dollars through equity. From 2004 to 2016, the crowdfunding value is raised.
Types of Crowdfunding
Various types of Crowdfunding is available in the market, out of which one can choose the best option as per their preferences
1. Investment-based crowdfunding: User can invest in a business and in return, they will receive a stake
2. Loan-based crowdfunding: User will give loan to company or individual and in return they will get interest for it. This kind of funding is otherwise known as peer to peer to business lending
3. Donation-based crowdfunding: this kind of crowdfunding involves giving money to the business, in return of which they receive nothing
4. Reward-based crowdfunding: Related to the project or any kind of support is extended in return of the fund to the user
5. Equity based crowdfunding: It involves an opportunity and contributions of the user to become a part owner of the company
Working of Crowdfunding
Before you invest on crowdfunding, one need to know the working of crowdfunding. Firstly, check out the particular project in which you want to invest, later on register on the platforms known and the depth of the investments. Knowing the platform to the core is mandatory.
Before investing in the platform, one need to check the following points
- Total fund needed by the company
- How much is raised as of now
- How much shared are being offered by the business
- What is the purpose of utilizing the money
- Duration of pitch opened
- How many number of people have registered
- What would be the returns
Risks of Crowdfunding:
There is an obvious risk in crowdfunding as it is totally a new concept. The risk in crowdfunding may include the following
- Boosting platforms: The website can be boosted itself, and the money may be lost after funding
- Selling is hard: Selling is a bit hard. The shares are not listed and it may be difficult to sell the shares.
- Returns are not guaranteed: It may not be divided into payment nor the shares may increase
- Business which are invested need to be boosted: the business that are invested upon need to boost up. If the business falls, share amount decreases
Reducing the Risk:
Risk is everywhere. In each and every competitive field, risk is associated.
The best to invest is to invest 10% of your investment money every year. Checking the financial status and the respective authentication is important. Extra care should be taken with donation and reward-based c crowdfunding platforms. Keeping in separate account would be better as crowdfunding services are not protective.
Tax Benefits of Crowdfunding:
Tax Benefits can be availed by the following two schemes
1. EIS- Enterprise Investment Scheme
2. SEIS- Seed Enterprise Investment Scheme
Conclusion:
Above mentioned is all about the Crowdfunding and if you are looking for Crowdfunding Solution, then visit companies like Kickstarter development company or FuGenX Technologies, a leading mobile apps development company in India which has expert mobile app developers.
Also, read our famous app: How much does it cost to develop a flipkart like app?
