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What Is Crowdfunding?

Crowdfunding uses the power of social media and the internet to enable people to raise funds, assist others in overcoming adversity, and achieve aspirational goals. You may help a buddy or a whole community via crowdsourcing. You may help with everything from paying for your own operation to realizing a student's ambition of attending university and more.

The rise of crowdfunding

There is sufficient data to estimate its global growth and trends. By 2020, it is projected that crowdsourcing will have surpassed venture capital as the primary source of funding. It is currently worth around $35 billion, and the World Bank predicts that by 2025, it will be worth $90-95 billion. Over the last two years, it has grown rapidly, and the figures plainly suggest that crowdfunding is here to stay. More crucially, it may one day become the primary source of funding for startups, with established financial market actors no longer dictating the market. There are already over 1,400 platforms functioning around the world, so there is no shortage of options. With so many options, it's becoming increasingly crucial to figure out which platform is best for your project.

The Benefits of Crowdfunding

For anyone looking to raise finance for their business or idea via crowdfunding, there are some important advantages you should be mindful of.

  • There are often minimal upfront fees or costs and this means there is some protection from risk when starting out
  • There is little financial risk with almost no start up debt
  • It's a great form of market testing and marketing research, seeking the opinion of your target audience
  • Money can be raised quickly and campaigns can go viral
  • Social networks, websites, and online platforms can result in speedy and widespread exposure
  • You can use the crowdfunding campaign to gauge public perception, generate interest, and obtain feedback
  • Crowdfunding enables more effective risk management as there is often less risk for smaller businesses

Four of the most common questions about crowdfunding

The simplest approach to comprehend crowdfunding is to realize that it can benefit everybody and that no cause is too big or too little to benefit from it. As a result, defining crowdfunding might be difficult. Some people may be concerned that their fundraising isn't as worthwhile as others, but the beauty of crowdfunding is that it may support a wide range of people with a wide range of needs. Whether you want to help your pet, gather money for a memorial, or obtain financial assistance, we can help. While most people believe that crowdfunding services are just for people in need of financial aid, businesses who want to support a new project or generate capital can also use the internet to gather funds.

Donation-based crowdfunding: When looking for "what is a crowdfunding campaign," one of the most prevalent terms is "donation-based crowdfunding." People look for and support a cause through donation-based crowdfunding by donating to it without obtaining anything in return. The individual in charge of the fundraiser is under no obligation to repay donors or provide them with anything else in exchange for their money. SupportMe is one of the most popular donation-based crowdfunding platforms.

Equity-based crowdfunding: In equity-based crowdfunding, the fundraiser organizer receives funds from people who want to invest in a firm. Investors will receive a little piece of equity in the business or corporation in exchange for their investment.

Rewards-based: Through rewards-based crowdfunding on platforms like Indiegogo and Kickstarter, the organizer of the fundraiser provides a reward or products to donors, usually a service or physical item, in exchange for a contribution.

Note: SupportMe only allows donation-based crowdfunding.

Absolutely. Every day, tens of thousands of people launch online fundraisers to generate money for themselves. It's reasonable if you are hesitant to ask for money. However, it's vital to realize that nearly everyone has faced financial difficulties at some point in their lives. You might be shocked by how many people want to help you when you are in need.

While there is no magic recipe for raising funds, there are things you may do to increase your chances of success. The most important thing you can do is organize a compelling fundraiser and cultivate a supportive community. Putting time and effort into your fundraiser tale can motivate your friends and family to participate. For more information on how to develop an engaging fundraiser and publicize it widely, go here.