What is Crowdfunding? | Types, Advantages & Top Crowdfunding Sites

Collaboration on the internet, Is a new era of exponential growth. Crowdfunding simply referred as a source of fundraising via online for a project or a cause. Individuals and small businesses can take advantage of crowdfunding for their early-stage startups.  Crowdfunding tap into the collective efforts of individuals and organizations, primarily the crowdfunding operates on online via social media, crowdfunding websites and personnel networks.

Types of Crowdfunding:

Investment-based Crowdfunding:

Investment-based crowdfunding is an emerging model of crowdfunding, In which businesses or the individuals who are seeking fund capital have to sell their ownership stakes as equity or debt in exchange for the funds.

Donation-based crowdfunding:

We can simply describe Donation-based crowdfunding as a campaign in which there is no financial return to the investors or contributors who be part of the crowdfunding campaign. The person who runs the fundraising campaign isn’t obligated to payback.

Reward-based crowdfunding:

Reward-based crowdfunding involves contributions from individuals and organizations to a business or a cause in exchange for rewards. The size of the reward usually depends on the amount contributed.

How Crowdfunding Helps you?

  • Idea Announcement:
    Providing a platform to announce your idea publically for free
  • Increase Your Network:
    A shareable profile allows you to increase your network in your core area, and more importantly, to friends of friends
  • Helps You to Raise Funds Quickly:
    Crowdfunding serves as a central direction to push all supporters to in a short period of time, usually between 30days to90 days. At the end of the fundraising campaign, funds will be collected from the supporters

How does Crowdfunding Platforms Make Money?

Crowdfunding platforms normally charge  3-5% percentage as fees from successful campaign creators. They may charge different percentage fees from successful and unsuccessful projects also the fees vary from the platforms and volume of the amount collected.

Top Crowdfunding Platforms:

Top Crowdfunding Platforms