Entrepreneurship these days has scaled new heights; thousands of innovative minds with no dearth of start-up ideas and planned steps are only concerned about the finances for implementation of the idea. However, intellectuals have left no stone unturned in innovating sources of capital funding, and crowdfunding is deemed as one of the alternative ways to finance a project, venture or even a cause.
The idea of crowdfunding involves the innovator or project initiator, crowdsourcing from people or groups who support the idea and a platform which facilitates proper communication and coordination between the two. The following articles give great insights to what actually crowdfunding links to.
The originator:
The mastermind behind the project can choice out of two types of primary crowdsourcing, namely reward based crowdfunding and equity crowdfunding.
Applicable in businesses ranging from software development, research to motion picture promotion, rewards based crowdfunding is done in trade of a future product that would be developed by the company. This saves the shares of the company from distribution to the crowdsourcing individual or group. On the contrary equity crowdfunding mainly deals with sharing of the equity of the budding project among the people involved in crowdsourcing.
The Investor:
It is the crowd sourcing of the project, which is required for building its walls. The funders here are an intelligent crowd, where an individual can choose from a pool of products and services to buy. An individual can, according to his choice act as a funder to a social cause. Depending upon the choice of the project funded in (rewards type or equity type), an individual can be deemed as a stakeholder or not. In the case of both rewards based and equity based crowd funding the crowd takes keen interest to promote the projects for their success lies in the success of the project. A wise funder not only does the initial funding but is laboriously attached with the project and at the end of the day yields up to his expectations.
The facilitator:
Crowdfunding platforms are indeed the matchmaker of the project initiator and the crowdsourcing group. They identify potential companies and publish their shares on their online platform for potential crowdsourcing funders to find them. A few notable crowdfunding platforms are myefunder.com , crowdcube etc., however, these companies function with different ideologies and practices followed by these websites are not the same. Some might focus on small investors while some gain the confidence of the funder to make huge investments, but to summarize, there basic role is of a relational manager between the two.
The point is simple; crowdfunding is very different from traditional project funding techniques, which were mainly meant for the one who had surplus either to invest or to take financial loan. Crowdsourcing not only transforms lives of more than a couple of people but also bestows the society with gifts of innovation and invention. The following crowdfunding platform’s blog http://myefunder.com/blog and myefunder.wordpress.com would help both seekers and funders to get direction to their motivation.
