Crowdfunding Exposed

Crowdfunding Exposed

Society has numerous inadequacies, most of which are not a personal responsibility to anyone. On the other hand, even for those issues that have people to take care of, they remain unaddressed calling for other solutions. One of the simplest ways to financing such ventures is through crowd funding. In essence, this practice involves raising money in small amounts from a lot of people.

One characteristic of this practice is that it is done using internet. The practice is common with filmmakers and musicians who have raised money in a number of occasions using crowd funding, to raise awareness. Other terms have been used to denote this practice. Some of them include equity crowdfunding, crowd financing among others.

So far, crowdfunding has been used to support an array of activities worldwide, such as disaster relief, political campaigns, scientific research and many others. There are instances when this term is used to denote a situation where a company disposes off equity in small amounts to a number of investors. However, the most common use for the term crowdfunding is the initial one.

Crowdfunding is slowly replacing government grants and the conventional bank loans. This is because it is effective when instituted properly. In case one has the intentions of starting an advocacy campaign, experts believe that using crowdfunding from different sources is better choice to borrowing where one will have to make good at high interest rates. In case anyone doubts the effectives of this practice, below are some of its benefits.

Most people who use this practice are non-profit institutions. These organizations normally do not engage in profit making ventures. In the event they need to raise money for any cause, it would serve them better to find ways that will not require them to give up equity. This is where crowdfunding becomes very useful to them.

You will rarely come across loans that are risk free. Even those given by governments have their fair share of risks. Crowdfunding gives people the opportunity to raise funds without getting themselves in any kind of risk.

If you are an entrepreneur, you probably think that a bank loan is the only way to fund your project. In most cases, loans lead entrepreneurs in unending debts. In addition, they pay the loans at high interest rates. However, you can easily bypass a loan through crowdfunding.

If you are looking to raise money to create awareness for a certain issue, crowdfunding will kill two birds with one stone. To begin with, you will get the money you need for the campaign. Secondly, the many people who come together to support the project will already have knowledge of the venture even before it begins. This means that crowdfunding apart from raising funds; it creates an ideal platform for marketing projects.

Further still, if you need long-term supporters for your project, crowdfunding is the way to go. For the most part, people will not donate for your project unless it excites them. The fact that you will get a number of people donating for your project should be a positive indication for potential supporters. You can keep engaging them for other activities or enlist them under your organization.

Internet is the major platform for raising funds through crowdfunding. Most people these days love online services because they are effective. You will not pay much to set up your campaign. In fact, you will end up with third party portals, who will volunteer to set up the campaign for you.

Those are just few among the many advantages of crowdfunding. So, next time you think of financing any project, you should consider crowdfunding as your first option.

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