Crowd funding is the name given to raising funds for business or social work from friends, family, consumers and individual investors.
This method brings a large population together for a specific business or social purpose.
Its main purpose is to establish a large business or social activity by is initially raising funds through an online social networking platforms and networking among themselves.
Crowd funding is basically the opposite approach to mainstream business. If you want to start a mainstream business or launch a new product in the market or expand the market, you may need to raise capital. It has to be sold to or to the organization. The key to raising funds depends on a few limited institutions, including banks, angel investors, and venture capital firms.
If you think of this fund-raising method as a funnel, the mainstream businessman and his business plan say that the wide field of funnel and the investor or capital collection is the funnel of funnel. If the trader does not set his goal towards the right investor or firm at the right time, both money and time will be wasted.
On the other hand, to raise business funds through a single platform through crowd funding, plans and resources can be arranged and presented using various personal networks to find the right investor online and raise funds easily from interested investors. Can be done.
What are the benefits of crowd funding?
Many investors can easily be grouped together in a network to raise business funds. The crowd funding method has several advantages over the traditional method of fundraising.
Easy to reach investors.
Fund able is a crowd funding platform that communicates with thousands of investors through which investors can campaign, raise funds, communicate and participate in a variety of ways. Fundraising can also be done quickly.
By creating a crowd funding campaign, you can look at the business from the very top-level. Campaign management can also be done easily.
Public relations and marketing.
From start to finish, crowd funding is promoted and shared through social media, email, newsletters, and other online marketing methods. It takes to close contact with investors. If there is no communication if there is no campaign, the investor loses interest quickly. So public relations and marketing have to be maintained at all times.
Maybe 1000 people will tell you the plan of business, 300 people will listen with their mind, 100 people will think for investment, 50 people will fully research the business or social work for which the fund is being raised. 20 investors will be found. In this way, when the number of investors in various business, or social activities increases, the possibility of getting more investors will be created faster.
Validity of business plan or idea.
Crowd funding provides an excellent opportunity to validate and refine an idea proposal by presenting a business idea or business to the public. Potential investors begin to express interest and ask questions. If there are a lack of ideas or business, questions and inquiries are quickly resolved which increases the chances of investors investing more quickly.
One of the best things about online crowd funding is the ability to centralize and consolidate fundraising efforts.
A group of all potential and potential investors can be formed with a single and unique business idea or profile. Everything can be done online rather than manual documentation, calculation. Goes.
What are the types of crowd funding?
There are different types of crowd funding depending on the type of product or business, type of service and goal or purpose. There are three main types of crowd funding.
Equity crowd funding.
Investors in this method of crowd funding campaigns or those who have contributed to fund-raising do not get any financial return. This fund is donated by investors.
Conventional donation-based crowd funding includes disaster relief, and other assistance, donations to charities, nonprofits, and fundraising for medical bills.
An investor contributes to business or social work in exchange for a reward that is usually offered through the company’s product or service. It is also considered a subsection of donation-based crowd funding.
This crowd funding makes the investor a partner in the ownership of the company or organization. The investor is then treated as an equity owner. And as an equity owner, the investor receives a financial return on their investment and shares the profits, and losses.
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