Crowdfunding is a method of raising money from a large number of people for a project and basic startup. Crowdfunding in India is generally done through social media.
Traditionally if you want to start a business so you had to make a proper business plan and find wealthy individuals or institutions for funding this maybe banks and investors, etc. Hence very limited options left.
So sometimes even you had to invest your lots of money but crowdfunding gives you the opportunity to showcase your business in front of many interested people and so gives them more ways to help grow your business.
you seeking funds can set a profile of their project on a website and you can then also use social media to share between friends, family, and other people to raise money for there project
What in it for me
- Types of crowdfunding
- A little bit of history
- Popular crowdfunding website
- Benefits and risk in crowdfunding
- Conclusion
- Faq
Types of crowdfunding in india
Reward-based
People generally invest in a project for 1 hour in reward-based.
Accordingly crowdfunding rewards are offered to people in exchange of funding awards and also that may include a product for any service that your own company offers.
Also it may include gifts for tickets for some events. Hence this is very easy method off-road funding because you may give anything like a reverse that people will gladly pay for.Also People love to be recognised for a small amount. So you make offer them because the need some sort of personal recognisation
Donation based
It is also one of the most commonly used forms of crowdfunding in donation-based crowdfunding.
However in this you are asked to invest for charitable causes .This type of crowdfunding is done for social or environmental cause donors for their social investment expect nothig and there is no reward for donating.Hence it is totally based on their will.
However ,In this type of crowdfunding do not come together forms an online computer for a common source of cost to help fund services for a variety of issues including Healthcare., social development
Equity based
In equity-based crowdfunding ,invest in a business or project in exchange of equity investors may receive a share of profit in the exchange of money.
Accordingly investors may also become part owners of your business
A little bit of history
The first online crowd funded project is thought to have occured in 1997. ock band Marian was unable to afford to tour to American fans use the internet to raise $60,000 .o they could play in the US they have since use the same techniques to successfully find the production of their following 3 album since then crowdfunding in india has grown on a for scale.
Popular crowdfunding website
Website such as Kickstarter and indiegogo attract hundreds of people.They are considered to be the popular crowdfunding website.
Also, Kickstarter is the largest crowdfunding platform it was founded in the year 2009. Kickstarter refractive funded more than 160000 projects with more than 4.2 billion dollar last for close all Kickstarter projects.
Initially, IndieGoGo started crowdfunding sites and focus on raising funds for independence cells. ut later on It begins accepting projects from all categories.
It was launched in the year 2007 it is more flexible platform than Kickstarter starter. eligious points only after the campaign has reached its funding goal whereas indiegogo to receive funding .s the the most significant difference between the two website it is more easier and less risky to go with the flexible funding.
Many of the products and businesses crowd funded on Kickstarter and become very successful for example oculus VR American company specialising in virtual reality. Hardware and software product was founded through the site in 2012 founder tamilukku Launda
Thereafter Kickstarter campaign to raise money to make virtual reality headsets design for video gaming available to developers. It was crowdfunded 2.4 million dollars 10 time the original goal 250000 dollars.
On the other hand another company that became successful with the help of Kickstarter is M3D
A company founded by two friends that manufacturer small 3D printers. David Jones and Michael Armani raised 3.4 million dollar for their micro 3D printer on the crowdfunding site in 2014.
Also read- who are angel investors ?
BENEFITS AND RISK IN CROWDFUNDING
Benefits for creators
Crowdfunding provide craters are number of benefits some of them are
Profile – successful project and can raise a producers profile it may also provide boost reputation
Market of crowdfunding in india
Project produces have an audience and market for their project.Also if the project become an successful, producers make get good market feedback
Feedback
When producers raise funds for his project he makes get an instant and Good Market feedback
Besides there also financial benefits to the creators traditionally the producer had to look upon the personal savings, loans, friends, and family welfare investors. ut now with crowdfunding creators can find a distance from all around the world. It also provides creators with instant feedback on the product
Risk for creators
Besides benefits creative may also have some risk in crowdfunding these are
Reputation
Failure to meet campaign goals may result in a decrease of reputation.
Also he projects may to reach its financial goals and successfully gathers public support .ut failure in the project make cause failure in one’s reputation
Public fear of abuse
There may be concern among the investors that the project may be a scam .he concern may become rich for the engagement of public.
Lack of participation
There may be lack of participation of people thereafter funding goals are not even reached
Benefits for investor
There are several benefits that crowdfunding provides to the investor.some of these are:
Reduce cost– it allows crowdfunding in the market and reduces search cost
Value of new investors.
Also, crowdfunding allows individual investors to be a part of the company they invest so they can add value to the company as well.
Risk for the investors
- The business may fail or won’t. Also, you may not get any of your money back
- If the business raises more funds later the equity you hold may decrease to what you initially bought
Conclusion
Crowdfunding is already part and parcel to many organizations’ and individuals’ wish to make the world a better place and help people around the globe to improve their lives. Its obvious benefit is raising money. Crowdfunding not only provides money to organizations, but it also boosts their manpower as the crowd that funds them also put their institutional structures on a broader footing. The supporters unwittingly become an additional marketing team by promoting the project they funded to their friends and networks.
Faq
The first crowdfunding started in 1997
yes crowdfunding trusted
Kickstarter and indiegogo
There are three types
1.Reward Based
2.Donation Based
3.Equity Based
Hi I’m Gurpreet singh, Engineer turned Digital Marketer | Entrepreneur |Mechanical Engineer|Visit gurpreetchawla.in
