Understanding Crowdfunding

What Is Crowdfunding?

What is Crowdfunding? Understand the basics. Consider Crowdrising, Point Blank It's Just  Easy!

As a new business owner, I moved to finding different ways to fund my business until it gets off the ground. I also enjoy blogging and being an  affiliate (sales) online. For the new followers  please note, my word is not set in stone. But I certainly try and help.So I decided to prepare this brief description of crowdfunding due to the feedback I've gotten. I truly hope this can help you some kind of way. This post may not make sense to you until you decide to crowdfund. But if you don't understand my unorthodox presentation, please keep looking get the understanding you need by researching before jumping into such a venture. Now not only am I analytical but  I learn fast, and I found out Crowdfunding is now trending. But really, what is it? 

Well the  simple definition . Crowdfunding is a form of fundraising. And In most cases you don't need to prove your income or have good credit. I say "in most cases", but there are types that may require some form of documentation. For the most part yes, it still holds true anybody can fundraise. Now if you are the one that sets up the campaign to collect money that would make you the fundraiser. In addition to asking for funds, there are several types of donors. Meaning people or organizations that will donate funds to your cause. But, you have to find them. Then there are those 3rd party platform providers. The platforms serves as a place for a person to ask, and for people to give. The platforms brings fundraiser and donor together. The platforms are mainly online and again its up to you to find the one that's best for you and your cause. Then after the platforms are created there are rules, regulations and fees to be paid to the 3rd party the guy that created the program/platform in most cases. 

 The most important thing about fundraising whether it be the traditional way or the trending way a fundraiser must, absolutely must get out there and put the word out. You must draw attention and massive traffic to your cause. Oh, and did I mention? Whatever method you choose you have to be able to promote your cause to friends, family and the general public to be successful in raising your desired funds. 

Get Access Here

In fact the meaning is to collect a small amount money from a crowd of people, mainly strangers. 

Types Of Crowdfunding:

1. Rewards-Crowdfunding: This is where backers give a small  amount of money in exchange for a reward. 

2. Donation-Crowdfunding: 
People donate a small amount of money in exchange for gratitude 
and to support a cause they believe in (most common).

 3. Equity-Crowdfunding: 
Investors put a lot of money into a project in exchange for a small part of the equity. Profits will be shared with the investor.  

4. Debt-Crowdfunding: This is more of a loan, the the 
lender expects to be paid back with interest. Loan qualification are loose, in some cases. 

So to recap: Crowdfunding is a form of fundraising mainly done online these days. There are different forms of crowdfunding, like donation based, and reward etc. And finally, it should be understood that anybody can crowdfund. Because crowdfunding is a means of fundraising each recipient should understand it's absolutely imperative to go out and find donors. 

Crowdfunding Platform: 

There are several crowdfunding platforms out there. Meaning there are places online you can build your profile and tell your story. Or the reason you need the money and/or support.  To name a few there are: GoFundMe, Indiegogo are a few of the common platforms. They are donation based crowdfunding platforms. Then there's SeedInvest, and WeFunder which are both equity crowdfunding. Kickstarter is the most common platform for rewards based crowdfunding platforms. Common-bond, and Zero-bound these are debt crowdfunding platforms. Debt crowdfunding is common in colleges and for students. Another platform is Peer to Peer platforms which is basically every day "joe's"  like you and I just paying it forward. 
I encourage you to look at the terms and the conditions to using the crowdfunding platform. This post will make more sense later. Pay close attention to the rules and requirements and fees. Make sure to know what type of platform you are a part of; debt, reward, donation, equity crowdfund. See how long your can hold your campaign, etc.

Who Crowdfunds? : 

Any and everybody crow-funds, from everyday people like you and I, to for profit and nonprofit businesses. Which means we can simply ask for a donations. We have a cause that must be funded right?

The most important part of crowdfunding is where to find people that will give to your cause. The Donor is of course the main part of this equation. They have the money, and of course the stipulations and requirements. There are all kinds of donors,( angles) donors, etc. The donor is the investor/lender. Then there is that guy who as made it possible for both the recipient and the donor to connect. For example; Gofundme, kickstart. Hence, platforms. The platforms are made up of different rules, regulation, fee's etc.

The MiddleMan:

So let's talk more about platforms, you know?  The  3rd guy, the middle man. Now, most of the donation platforms are created as follows. The recipient will go online build a profile and start directing traffic to the cause. The donors (givers/investors) give to your cause. That's what I refer to as a platform. Donors, use a secure site, like paypal, etc to donate to your cause on this site/platform. When you the recipient withdraws the funds you are charged a percentage of up to 20%.  For some of these platforms.The equity and reward  crowdfunding sites recipients end up paying both the donors and platform. And example of a reward would be..If anybody donates $200.00 or more the fundraiser will give a free, subscription for a year. Or some kind of reward will be offered to the donor.  And Finally another platform I found attractive is Peer to Peer crowdfunding. These platforms are made up of regular everyday people like you and I. 

REVIEW

Crowdrising :

is my personal

favorite. And I will share why, first, 
The donation amount

is $20.00.( low risk,) fundraiser donates to a cause

to get on the platform. And then a donor

pays if forward to  your cause. The funds come immediate to the campaign. Nobody holds the funds or charges for the transactions.  

For more info. click the: Get Access Here link.

The platform is setup to help raise funds fast. I though about a pyramid scheme at first. Yep, major concern..

Then I realized the the funds were coming directly to me.  That eliminates any thoughts of scheme. 

The platform takes a bit to understand but it does make sense to me and I do favor this format  over the others. Its an example of Peer to Peer crowdfunding.

My 5 Reasons:

1. because I didn't have to build up a sympathetic story or fill out a lengthy profile to start the setup. The Crowdrising done for me process only took a few minutes.

 2. The platform is a Peer to Peer format. The only requirement is a pay it forward method. A $20.00 investment from me. And every donation comes directly to my paypal account with no fees from the middleman, thereafter. The platform structure is dear to my heart because it allows you just to invest in everyday people. It's a "win-win" for both the recipient and the donor.

 Crowdrising Structure ( P2P) Peer to Peer.

Recipient: Invests $20.00

The next 5 people that invest $20.00 will come directly to your account. As the recipient I invest  an additional $40.00 in a person and the next 5 people invest $40.00 in me..and so on..Pyramid Scheme??? no! but  only because the funds come to your account immediately. So for every donation I make after 5 people, I'm required to pay it forward, which averages out to be 10%. The roi of my investment is pretty good. And I'm still raising money for my cause.  While paying it forward. It's a good feeling to know another one of my peers is investing in me with no rhyme or reason. 

3.  The system gives the donor 3 days to decide, and then it erases the information from my account. But it's build me a nice buyers list. I know that each person that signed up is looking to get or make money online and or a good online deal. It's a perfect way to build a real buyers list for some of my products and services.  

4. The risk the greatest risk is losing $20.00. And at bare min. the system will continue to collect the traffic I need. The system brings at least 10 new spectators a week. Again, these are fresh leads.

5. Finally  what sealed the deal for me was the risk. In this case Crowdrising hands down is best for me. Listen things happen. The recipient that raised all the money may suffer a tragedy. Or just simply a fraud. Anybody can set up a gofundme page. But there are so many stories of crowdfunding gone wrong it scared me away, from donating or setting up profiles in the traditional matter so to speak. What happens to the donors who has invested in your cause and you lose their money? Whether it was a donation or not; enough backers could make it a legal nightmare for you the recipient. Be careful...

Crowdfunding Gone Wrong:

Just to name a few (for detailed stories, google):

1. Ed Carter the maker of the deluxe game: Glory To Rome.

In 21 days Ed raised $73,000 almost 4 times the $21,000 he asked for. For investing Ed promised 1,600 backers a free game.The outcome Ed lost his funds, house and car...Please google Ed Carter, Glory To Rome deluxe game. 

2. Zoned Eyez video recording glasses for facebook. Raised $343,400 in funds again over 4 times the amount of requested funds. Long story short, over 1,090 customers that donated over $150 would get a free pair of glasses..That did not happen and the money in both cases is gone. Both where reward crowdfunding initiated by the recipient. Google for more info. 

In conclusion, this blog is here for a reference because there is so much you need to know. There is a chance this info will go over your head, most anyway. But here are a few take-aways.  The basics: you are the fundraiser. Setting up a campaign online is called crowdfund. The concept is being able to collect a small amount of money from a crowd of people most being strangers. Crowdfunding is not the only way to fundraise it's just the trendy way right now. The platforms that bring recipient and donor together vary from P2P to Debt crowdfunding. These platforms may charge a fee. And finally, no matter what type of crowdfunding platform you choose you must be able to draw a large amount of traffic to your campaign. You have to get the word out.  

And that is the basics...

thanks for your time...


see ya next time,

LP