Crowdfunding – How Crowdfunding Works | Types of Crowdfunding
What is crowdfunding? Do you have a project you feel like promoting but don’t have the necessary resources to go about it? If you are, I have the answer for you. Crowdfunding is just what you need. With crowdfunding, you will get the required funds needed in promoting that project you desperately need to promote.
Over the years crowdfunding platforms have grown s popular and are making the rounds. Crowdfunding is a means for businesses, charity, people and other organizations to raise money. It is the practice of funding a particular project by raising small amounts from a large number of persons. This is typically done through the internet. Do you know that in 2015 alone, over USD 34 billion was raised worldwide?
How Crowdfunding Works
There are lots of crowdfunding platforms in the world today. You can directly and easily donate or invest in business and organizations or projects via these platforms.in these platforms you should be able to see the overview of various projects being pitched. To donate or invest, you may be required to register with these platforms. When you find a project that you want to invest in or donate to, you will need to look for more details. In these campaigns, you will see how much the said campaign wants to raise, how much it has raised so far, the share in the business offered, the purpose of the campaign, how long the pitch is open, how many people have invested in the campaign and many other relevant pieces of information.
Types of Crowdfunding
There are various types and they vary from each other. The types of crowdfunding include;
- Loan-based. This is the type is where you lend money to individuals or businesses and in return for a specific interest rate. This is also referred o as peer to peer or peer to business lending.
- Investment-based. This is when you invest in a company and receive a stake in the company in return.
- Reward-based. This is when you get a reward for your investment in the project you are supporting.
- Donation-based. This is where you donate to a charity or a person.
These are the types of crowdfunding we have. To invest in any of these platforms, visit them online and start making your donations and investments.