Crowdfunding: A New Way of Raising Money for Investment

What is crowdfunding?

Crowdfunding is a means of through which people, businesses, and political aspirants or charities raise money to finance their projects. This is done by a group of persons pitching and posting the details of their project, businesses, or ideas on a crowdfunding website and from which individuals or organizations who wants to invest their money or donate their money depending on the purpose of the return, will then invest or donate to fund the project.

Crowdfunding may also be done through one’s vast network of people on social media platforms.

Types of crowdfunding

Investment

This type of crowdfunding is just like the conventional way of investing in a company through the buying of shares in order to have a stake in the company. So, investment crowdfunding is where you invest in a business and in return have a share or an equity stake in the business

Donation

This type of crowdfunding by its name is very clear. Nonetheless, it is such that you donate to a person or a charity and you may be promised something in return or promised nothing at all

Reward

The reward-based crowdfunding is one you donate your money to finance a project and in return be given a reward linked to the project you supported, i.e. a small gift or a product sample.

Loan

The loan-based crowdfunding is one you lend you money to an individual or an organization in return for an interest rate given with the principal amount. This is much faster and easier than the banks’ and as such some people prefer it.

How it works

Crowdfunding has created an opportunity that pulls investors and entrepreneurs with potentials of increasing entrepreneurship together and thus, helps the entrepreneurs raise thousand and millions of money to go fund their ideas and in return the investors gain rewards for their contributions.

You may need to register with a crowdfunding website to view project pitches and to invest in a project that may interest you. However, as an investor, you should be careful so as to minimize risk when you want to invest look through the details of the business, the individual or organization seeking investment before you pull in your money.

Some of the internet crowdfunding

  • Kickstarter: this is one of the biggest internet crowdfunding known all over.
  • Indiegogo: this seems to be the second-best internet crowdfunding, this one usually provides two options of funding, as in fixed and flexible funding.
  • There is the CircleUp best for equity funding
  • Patreon; fundable; crowdfunding et Cetra
  • GoFundMe: This is another big and it is known for its peculiarity to funding individuals for personal causes. Whether a person is raising fund to pay medical bills or to pay children’s education or as an entrepreneur raising money to expand his business or to open new ventures. A lot of persons are taking advantage of and really benefiting from GoFundMe.

Simple steps to make your fundraising campaign go viral

Ask a simple prize

That is, ask a bite-sized prize that people can easily give away. Where you are asking for $10000 it will not go viral how if you ask like $20 or below it does go viral

Supporters with good network

Find persons who have got broad network are not shy to promote your charity. These persons can help spread your campaign and make it go viral

Have a simple description of your idea

For your fundraising campaign to go viral you need a good, brief and easy to explain concepts. Make sure to be able to explain your campaign quickly and accurately to the understanding of any person and do not forget to explain even passionately

Related: FCMB Mobile Plus Online Banking for FCMB Customers

Final words

In everything we engage in, there are one or two risks involve nothing around us is risk-free, however, you can decide not to do anything for fear of risk all it takes you is to do is to take some precaution in order to minimize risks.