What is crowdfunding?
It is a process by which people give a small amount of money to collect a large amount of money usually for a cause. It is kind of an alternative finance and crowdsourcing. There are several kinds of crowdfunding, online being the main. It consists of 3 parties-the one that will be getting the money, the one that will be arranging the crowdfunding by providing a platform and the people who will be contributing for the cause. Crowdfunding is done for several causes including travelling entrepreneurial ventures, medical reasons and others. Crowdfunding is a very important way of collecting money.
Why is crowdfunding important and how long has it been around?
Crowdfunding is essential in places like India because most people are below the poverty line and can’t pay their medical or other bills. Crowdfunding in its raw form has been around for quite some time. Fundraiser in India have known to collect money from the people by displaying their medical bills for quite some time. However, doing it with the help of internet increases its legitimacy and makes everything happen in a more organised way.
Crowdfunding can also be essential if you are trying to start a business because crowdfunding can also increase the customer base and make more people aware of the initiative. Fundraisers in India especially, have been known to use crowdfunding to start their business ventures. One must however make sure how he is executing his campaign because a poorly executed campaign won’t garner a lot of attention.
The four crowdfunding trends for 2018:
Crowdfunding has raised billions of dollars for various causes. It has been the go-to for millennial to fund their needs. With the growth of platforms and different ways to crowdfund, it is important to be aware of the various trends in crowdfunding.
- Crypto currency: Crypto currency has been doing the round for quite some time. It is this internet money has been the rave in our times. Bitcoins has been a part of our lives for quite some time now, hence it is also a part of crowdfunding now. This has been made possible with the creation of an ICO. Companies create an ICO to get the funds from the general public. This is the procedure to add crypto currency to the market.
- White label technology: White label technology has been doing the rounds for a while now. The white label technology gives everyone a chance to open their own fundraising platform. White label technology is a favourite among companies. Much like any other e-commerce subscription, the customer signs up for a plan, the white label technology hosts and caters to any issues that the person might be facing. Unlike most platforms, the white label technology doesn’t take up 5% of the donations and this can help save thousands of dollars
- From a fundraising campaign. Starting from only $39.99 anyone can have their own fundraising component on a website.
- Real estate crowdfunding: Back in the days, real estate growth was only available for investment through private equity in the development company or through real estate investment trusts (REITs) and was not possible via direct investment for most individuals. As the concept of crowdfunding was growing, the Jumpstart Our Business Startups Act of 2012 modified certain rules under Regulation D that opened the door for more direct marketing and solicitation to accredited investors.
Predicted expansion: Crowdfunding is supposed to expand to 93 billion by 2025. It is a huge business and several platforms are making great profit off it. Other nations like the UK are trying to make more liberal regulations for crowdfunding.