What is Crowdfunding?

What is Crowdfunding?

The Major Categories of Crowdfunding and How to Participate

Crowdfunding has become one of the hottest terms in the world of financing in recent times. The great thing that Crowdfunding does is that it makes the most of microfinancing and crowdsourcing. It takes advantage of both of the platforms to create a unique solution to your everyday financing needs. It helps bring together people who want to invest in new companies and projects. 

The Crowdfunding market is continuing to grow at a fast rate and it has transformed the way in which we deal with our money. The platform has also transformed the way through which businesses raise money. 

Peer-to-Peer Lending

Have you ever loaned money to someone when you were younger? Chances are high that you have. There are many new Crowdfunding platforms which allow the borrowers to seek money outside of the conventional banking route which has proven to be tiresome and that is why with platforms like Lending Club, borrowers will be able to access funds much more easily.

Anyone who wants to take a bit of risk and lend money to people will be able to create their own loan portfolios with just a tap on the screen. The Lending Club is a lending gorilla which offers lending of up to billions per annum. There are many platforms but Prosper has been one to offer most options.

Equity Crowdfunding

It may be the smallest piece of the cake but equity Crowdfunding offers one of the most potential especially in terms how one invests their money. The equity Crowdfunding platform allows one to make investments in all private companies easily.

There are many online venture capitalists which are investing heavily in the field of equity Crowdfunding due its high potential. One will be able to invest in the latest startups with just as little as a $100. Many big names are entering the market such as full disclosure and AngelList.

Reward Crowdfunding

There have been many reward-based platforms which have been rewarding users such as Kickstarter which offers users who donate to the platform to watch content that is produced by the company and the people who donate can even be given varying level of rewards such as the possibility to watch the movie or show when it is being made and to be play the part of an extra.

Anyone can pledge money to the project which may be either movies, shoes or music albums. 

Donation Crowdfunding

Many of us want to bring about a change in the world and will look for ways to do just that. This is where donation-based Crowdfunding comes in as it relies on charity to support any project for the welfare of the poor such as the Crowdfunding initiative taken in Pakistan to fund mega dams in the region for the accessibility of water to the poor and electricity generation.

Donation-based Crowdfunding has become very famous all across the world, and individuals are using the platform to bring about a social change.

Human Talent Crowdfunding

Human Talent or Capital Crowdfunding has recently become a popular thing. There has been Crowdfunding to provide top athletes or talent with the money they need in order to succeed such as by paying for college of the underprivileged. 

Real Estate Crowdfunding

It is one of the newest contenders in the Crowdfunding world. Real estate Crowdfunding provides investors with the opportunity to invest in real estate ventures by loaning money to interested people who want to buy property.

Crowdfunding is only likely to become more popular with the passage of time. It has opened a new way to fund projects and just about anything.