Crowdfunding: How does it work?

                                crowd funding
Crowdfunding is a method which was developed to raise capital through the accumulation of capital from family, friends, individual investors, and customers. And the capital is accumulated by presenting your idea to the outside world and allowing them to contribute to your goal online. The word ‘crowd’ present in the crowdfunding explains itself. However, crowd, in literal terms, mean organization or people.

How does it work?
In a crowdfunding website, you'd be able to see the overview of the projects being pitched. In certain cases, you might need to register to get more details, see the pitches, or to invest in a particular project. 

The social enterprise, business or individual that wants to raise money should share the following details with you: the amount of money it wants to raise, number of people who have already invested, in what way the money would be used, total amount raised till now, for how long the pitch is open, what are they providing in return.
How to Launch the Campaign?
  1. Create a Profile
Creating a crowdfunding profile that is appealing yet convincing is very critical for your success. Creation of such a profile includes supporting copy, product images, a pitch video and explanatory graphics.
  1. Set a Goal
Setting a particular amount that you wish to achieve is an essential part of crowdfunding. What also should be kept in mind is that some sites have alternate options to collect the required amount even if the goal isn’t met, whereas others expect that you meet your goal before collecting any funding. In that context, if you don’t reach your goal, no fundings can be collected. So, don’t be greedy and set a goal that isn’t tough to achieve.
  1. Market to your Audience
And the most important key role is played by the marketing. Even if your profile is good, without marketing, it would be completely useless. And, honestly, it’s a lot of work. Some companies assign a dedicated team to just do the crowdfunding for as long as the campaign lasts. You’re going to be dependent on your team to make you achieve your goal.
  1. Collect Funds
If you’re lucky and your goal is successful, the funding that you’ve received from people is transferred to your account in one or two ways that are mentioned below:
  • Rewards crowdfunding- By providing credit card details, the money is wired to your account.
Equity crowdfunding- Directly you’ll be connected with your investors for completing the transaction.
Crowdfunding: How does it work? Crowdfunding: How does it work? Reviewed by Newzpot on 00:56:00 Rating: 5

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