Crowdfunding is a financial method of raising funds from a large number of people typically via internet. Once you get thousands of donors, you will definitely get a large amount in your hand, thanks to those nonprofit websites who organise fundraising programs. Crowdfunding websites are referred to as a platform because they manage all kind of campaigns, payment gateways, public interfaces & project tracking.
According to a research, there are numerous crowdfunding platforms across the world which are responsible for generating billions of dollars annually. A successful campaign can also generate some serious cash on hand and also give the proof of concept to investors. Crowdfunding requires a lot of hard work for raising small sums generally from thousands of strangers. Social media platforms like twitter, Facebook, as well as other type of media also plays an important role in it. Crowdfunding has also been used to fund some entrepreneurial ventures like hospitals, medicine expenses, artists, travel, and other community oriented projects etc.
How Does It Works:
1) The most common type of crowdfunding fundraising is where donations are returned in the form of special rewards or gifts this could mean free products or an opportunity to design products or services.
2) Crowdfunding is also used for royalty financing and to assemble loans Lending club, for example, allows members to directly invest in it and borrow from each other for eliminating the banking’s middleman hence both sides wins in such type of transactions. Although, it is rare but the idea behind is to link business owners who lend money for a guaranteed percentage of revenue.
3) Some websites like the Holy Grail sells company’s ownership or stakes under crowdfunding website therefore, acts as a mini IPO’s without traditional hurdles.
4) Funding4Learning is dedicated to educational programs and run campaigns to sponsor education, student debt payments, & other education related programs.
Benefits of Crowdfunding Websites:
1) Funding:- Although funding isn’t everything but it is considered a very important factor. It helps you to finance your projects. If you have a brilliant project, then crowdfunding will help you to raise money for launching. There are some best online event registration websites that can definitely help in arranging a large amount for you.
2) Market research:- Market research is one of the most compelling benefit of crowfunding websites as it gives you an fair input which you won’t get from your family and friends. This feedback is beneficial, especially in cases of newly launched products it will also give you an opportunity to evaluate interest for your product.
3) Feedback:- It is the best way to test public reactions for your products. Share your idea and they will give you a feedback. Give them a product and they will share their inputs on how to improvise. If you get positive feedback, then there is a high possibility that your idea may work in the market.
4) Pre-Order:- Crowdfunding is the best place for selling new concept idea or the product before bringing it in the market. Pre -sell some items, note the feedback and do the required modification and customization as per the feedback before make it fully live. For many people this is one of the biggest benefits of crowdfunding.
5) Loyalty:- Another benefit of crowdfunding is that it builds your team of loyal customers. They are a part of your success because these guys are going to be first to respond to your survey, buy your products and become first potential customers.
6)Word Of Mouth:- Another benefit of crowdfunding is that it doesn’t have a commercial images so, everyone is much more inclined to help and if your campaign run successfully, then you get more supporters. The overall idea is to make the campaign viral — to gather believers and draw in media attention for success.
Summary:- Crowdfunding is the a popular way to raise money from people through online social platforms. Achieving success through crowdfunding fundraising requires a lot of co-operations, effort and hard work from various sources.
Author-Bio:- “Eventry” is a leading event management service provider in Sweden. They specialize in arranging different types of events. Their highly qualified and experienced team can offer creative ideas and innovative solutions that will help the brand to grow.
