Each of the crowdfunding websites offers a great avenue or platform for entrepreneurs to raise money to finance their great ideas.
Crowdfunding is just a new way to invest. It offers people the opportunity to invest and follow a company’s progress and be part of their success.
Crowdfunding methods have helped thousands of entrepreneurs across the globe. It’s is now becoming a really popular way to raise funds, especially, amongst the young entrepreneurs aspiring to make it big.
Investors, family, friends, or people with an interest in a business now have an easy way to invest in people and companies that they want to support with Crowdfunding.
How Crowdfunding Websites Work?
As mentioned above, Crowdfunding gives you the platform to raise money and generate support for individual projects and gives the crowd the opportunity to invest in an idea they believe in.
Entrepreneurs or the people behind the great ideas submit them to Crowdfunding websites adding rewards, a project video, their story, and images to launch their campaigns.
Lots of people – each giving a small amount – can make good things happen. The ‘crowd’ decides what’s good, what’s not, what they want to fund, and what they don’t. If the crowd doesn’t back the project then it won’t happen.
Usually, you will have 4 to 6 weeks to raise a target amount via an organized campaign.
Most of the Crowdfunding websites work on an ‘all or nothing basis. This means that no funds will be released unless the target is met.
Communities can individually pledge money to a project and in return will receive a reward. Rewards are usually given in return for pledges and can be anything from a personalized thank you letter to a one-off experience.
Crowdfunding Project Owner
Crowdfunding websites are great for gaining a massive fan base and testing your idea out on the crowd, thus validating your idea. A fun, easy, and fast way of raising money without borrowing from the banks.
It couldn’t be easier to raise money. All you need is a good idea, some tangible rewards, a short project video explaining what your project is, and most importantly passion.
Posting your project on most of the Crowdfunding websites is free, and all project owners offer rewards to investors in return for pledges from as little as $5. And if you don’t hit your target you don’t get charged.
Crowdfunding Investors / Backers
As an investor or a project backer, Crowdfunding websites offer a great avenue to you to back projects that are close to your heart; making it super easy for you to invest your money.
In return for funding a project, you will usually get a reward from the project owner. This could be anything from a ‘big thank you to a one-off tailored reward just for you, both the project owner and backer win.
Most Crowdfunding websites take payments via electronic payment services such as PayPal.