Crowd Funding Works

One of the most important steps in starting your own business is finding the initial capital. Most business owners try to get cash from investment bankers or venture capitalists, while others turn to their friends and relatives. If neither option sounds tempting, there’s a third way - using crowd funding.

So, you have a great idea about a product, but don’t have the capital to make it into a tangible reality? Registering your project on a crowd funding platform is an excellent way to get the cash you need to kick-start your business. These online platforms generally allow for three options: donation crowdfunding (when people invest simply because they believe in you, without expecting any returns), debt crowdfunding (when investors expect their money back with interest), and equity crowdfunding (investment in exchange for equity). These investors can be people from all parts of the world and the amount they invest can vary between any two numbers you can think of.

So, is crowdfunding a successful and viable way to get your initial capital? Research suggests so. Crowdfunding yields especially god results in cases, when you provide your investors with the opportunity to pre-buy your actual product. Equity crowdfunding is even more successful and constantly growing in popularity. It presents both entrepreneurs and investors with equally good opportunities and, thanks to crowdfunding platforms, is more accessible than ever. 

The main advantage of crowdfunding is that they connect you, as a business owner, with a larger audience. You can capture every possible funding type and capitalize your innovative idea in a matter of weeks (and sometimes, even days). Of course, not every company will be funded, but with a well-written description, excellently-presented business idea and exciting opportunities, your startup can finally get a chance to obtain that initial capital!