{"id":308,"date":"2022-09-25T09:49:00","date_gmt":"2022-09-25T09:49:00","guid":{"rendered":"https:\/\/www.socialforaction.com\/blog\/?p=308"},"modified":"2022-10-13T09:49:53","modified_gmt":"2022-10-13T09:49:53","slug":"who-uses-crowdfunding","status":"publish","type":"post","link":"https:\/\/www.socialforaction.com\/blog\/who-uses-crowdfunding\/","title":{"rendered":"Who Uses Crowdfunding? Here&#8217;s All You Need To Know!"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #222222;color:#222222\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #222222;color:#222222\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.socialforaction.com\/blog\/who-uses-crowdfunding\/#who-uses-crowdfunding\" title=\"Who Uses Crowdfunding\">Who Uses Crowdfunding<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.socialforaction.com\/blog\/who-uses-crowdfunding\/#the-bottom-line\" title=\"The Bottom Line\">The Bottom Line<\/a><\/li><\/ul><\/nav><\/div>\n\n<p>The rise in the number of startups and venture capitalists\u2019 interests in B2B tech companies has led to a growing curiosity about crowdfunding. It has even given a fillip to websites like Social For Action, Ketto and Milaap, which helps even laypersons to get funding for projects close to their hearts. Crowdfunding primarily uses small amounts of capital from several individuals to finance a new business venture.<\/p>\n\n\n\n<p>Think of it like a money pool, where participants hope their small contributions to a project will pay off big time when that project gets off the ground and becomes a success. Crowdfunding can also be used for contributing to help a cause or a person in need.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"who-uses-crowdfunding\"><\/span>Who Uses Crowdfunding<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>As you\u2019ll no doubt know, to launch a new product or venture you often need a lot of cash upfront to make it happen. Crowdfunding is a way of raising that money from a \u2018crowd\u2019 of many individuals, rather than a handful of angel investors or venture capital funds. Crowdfunding platforms allow anyone with a great idea to set up a page that enables lots of people to contribute funds towards it. If you have ever pre-ordered a product on MIlaap or contributed to a Social for Action campaign, you\u2019ve supported a crowdfunding drive.<\/p>\n\n\n\n<p>Crowdfunding is most often used by startup companies or growing businesses as a way of accessing alternative funds. It is an innovative way of sourcing funding for new projects, businesses or ideas.<\/p>\n\n\n\n<p>It can also be a way of cultivating a community around your offering. By using the power of the online community, you can also gain useful market insights and access to new customers.<\/p>\n\n\n\n<p>This guide is aimed at entrepreneurs, businesspeople and companies, especially small and medium enterprises. If you are thinking about ways of financing a new business or idea, or have heard about crowdfunding and want to learn more, you may find this guide useful<strong>.<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Peer-to-peer lending<\/strong><\/li><\/ul>\n\n\n\n<p>The crowd lends money to a company with the understanding that the money will be repaid with interest. It is very similar to traditional borrowing from a bank, except that you borrow from lots of investors.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Equity crowdfunding<\/strong><\/li><\/ul>\n\n\n\n<p>Sale of a stake in a business to a number of investors in return for investment. The idea is similar to how common stock is bought or sold on a stock exchange, or to a venture capital.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Rewards-based crowdfunding<\/strong><\/li><\/ul>\n\n\n\n<p>Individuals donate to a project or business with expectations of receiving in return a non-financial reward, such as goods or services, at a later stage in exchange of their contribution.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Donation-based crowdfunding<\/strong><\/li><\/ul>\n\n\n\n<p>Individuals donate small amounts to meet the larger funding aim of a specific charitable project while receiving no financial or material return.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Profit-sharing \/ revenue-sharing<\/strong><\/li><\/ul>\n\n\n\n<p>Businesses can share future profits or revenues with the crowd in return for funding now.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Debt-securities crowdfunding<\/strong><\/li><\/ul>\n\n\n\n<p>Individuals invest in a debt security issued by the company, such as a bond.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Hybrid models<\/strong><\/li><\/ul>\n\n\n\n<p>Offer businesses the opportunity to combine elements of more than one crowdfunding type.<\/p>\n\n\n\n<p>Crowdfunding platforms are websites that enable interaction between fundraisers and the crowd. Financial pledges can be made and collected through the crowdfunding platform.<\/p>\n\n\n\n<p>Fundraisers are usually charged a fee by crowdfunding platforms if the fundraising campaign has been successful. In return, crowdfunding platforms are expected to provide a secure and easy to use service.<\/p>\n\n\n\n<p>Many platforms operate an all-or-nothing funding model. This means that if you reach your target you get the money and if you don\u2019t, everybody gets their money back \u2013 no hard feelings and no financial loss.<\/p>\n\n\n\n<p>There are a number of crowdfunding types which are explained below. This guide provides unbiased advice to help you understand the three most common types of crowdfunding used by profit-making SMEs and startups: peer-to-peer, equity and rewards crowdfunding.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"the-bottom-line\"><\/span>The Bottom Line<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In the past, when someone wanted to fund something \u2014 be it a project, a company, or anything that required capital to start \u2014 there were a few ways to raise money. They could take on debt from a loan. They could raise money from friends, family members, and angel or VC investors. They could even take the &#8220;bootstrapping&#8221; route and scrounge up as much money as possible to fund the project themselves.<\/p>\n\n\n\n<p>In the late 2000s, a fourth option became viable for those trying to get something off the ground: crowdfunding.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.socialforaction.com\/\">Crowdfunding<\/a> is a way to raise money from a large number of people. Large groups of people pool together small individual investments to provide the capital needed to get a company or project off the ground. Individuals, charities, or companies can create a campaign for specific causes and anyone can contribute.<\/p>\n\n\n\n<p>Social For Action makes it easy for companies to raise through crowdfunding. We do thorough background checks and vetting to ensure that all companies raising on our crowdfunding platform are credible. We\u2019re home to a diverse community of angel investors, including some of today\u2019s top VCs, and connect them directly to new funding opportunities.<\/p>\n\n\n\n<p>If you know someone with a startup or early-stage company looking to raise funds for their company, you can refer them to Social For Action today. Our team will set up a time to talk about their venture and see if crowdfunding is right for their company.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The rise in the number of startups and venture capitalists\u2019 interests in B2B tech companies has led to a growing curiosity about crowdfunding. It has even given a fillip to websites like Social For Action, Ketto and Milaap, which helps even laypersons to get funding for projects close to their hearts. Crowdfunding primarily uses small [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":313,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-308","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crowdfunding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Who Uses Crowdfunding? Here&#039;s All You Need To Know | Social For Action<\/title>\n<meta name=\"description\" content=\"Starting a Fundraiser? How to ask for donations in 6 easy steps, check out our hot tips below. Whether you\u2019re planning on raising funds on your own. Read more.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.socialforaction.com\/blog\/who-uses-crowdfunding\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Who Uses Crowdfunding? Here&#039;s All You Need To Know | Social For Action\" \/>\n<meta property=\"og:description\" content=\"Starting a Fundraiser? How to ask for donations in 6 easy steps, check out our hot tips below. Whether you\u2019re planning on raising funds on your own. 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