Crowdfunding is a type of business investment where a group of investors invests surplus capital into business ventures that need a regular supply of money. The process involves pooling funds online with the help of small contributions from a large number of people. This is a low-cost and effective way of raising business funds.
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Investors can invest in projects and businesses through dedicated websites and thus helping small entrepreneurs to fund their businesses. These websites also help NGOs to raise money and is instrumental in funding various social causes like medical treatments, funding education or disaster relief.
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Here is a complete list of the various types of crowdfunding options:
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Crowdfunding is mainly collecting small amounts of money from investors for a specific project or a business venture. This method is mainly used by small a business that doesn’t have access to share market for raising money. Crowdfunding is a good way to fund business expansion or arrange working capital without seeking a bank loan.
Crowdfunding is mainly conducted through online websites that give businesses a platform to raise funds from a large number of people. When you visit these sites, you can get an overview of the business that you are interested to invest in. However, you have to register with the website to get a detailed insight into a project or to invest in it.
The fundraising campaigns mainly consist of a business pitch that includes an overview of the business, the business plan, management details and details of the money that is needed to fund the project. Depending on the crowdfunding platform i.e. reward-based crowdfunding or equity-based crowdfunding the businesses can offer equity or rewards in exchange for the investments.
If you wish to invest in such businesses here are a few things you should check:
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Start-ups and small businesses can make use of the web-based platforms to raise funds by pitching their vision to potential investors or donors. The crowdfunding websites usually charge a fee from these businesses which are using their platform and services to raise money for the cause. Reward-based crowdfunding and donation crowdfunding is common in India and are mainly used to collect fund for a social cause.
Interested investors pledge money through these platforms. The crowdfunding platforms charges cut money and the remaining amount is passed on to the start-up. Start-ups need to constantly pitch their business to the investors and drive their interest to achieve the fundraising targets. On raising the funds, these start-ups have to work hard to keep the investors updated and engaged, as well as focus on growing and achieving their business targets.
In India the crowdfunding industry is estimated at Rs. 300 crores. There are top 10 crowdfunding websites that help raise money for medical emergencies, creative ventures, start-ups, social cause and even personal needs like funding education. Listed below are the top 10 crowdfunding platforms in India:
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