As of today, social media is changing dramatically each day and this is really great for the purpose of marketing and communication to other people. In account to this, the process of raising capital changes, too! Due to these uncontrollable and inevitable changes, crowdfunding sites have started to mush room on the face of the internet and that they have significantly popped out to connect a great deal of entrepreneurs with the investors, production companies with the patrons, and causes with the contributors.
What is Crowdfunding?
Crowdfunding was actually coined from the crowdsourcing idea which simply entails outsourcing certain tasks which are commonly performed by a contractor or an employee, or an undefined group of individuals in a specific community which is known as “crowd”. Thus, it is understood from this definition that crowdfunding is a way to pull the community together in a way so tight and disparate to fund a specific project, cause, or business which is commonly performed on the internet.
How Does Crowdfunding Works?
Rules may vary from site to site; people or charities and businesses pitch ideas, set fundraising goals, and set deadlines for the acts of raising funds. It is the patrons themselves who review the pitches and from thereon, they will have to formulate a decision whether or not they should support the project. It is understood that when a person has decided to join in a crowdfunding project, he is not known to be an investor but a funding person instead. However, it is noted that these funders will get the rewards of his efforts and funds given to the project once the project has prospered. Being a finder does not also entail becoming an owner of some parts of the business or project.
Certain countries outside the United States also come with crowdfunding sites like in Ireland wherein the crowdfunding sites in here make use of euro instead of dollars. This is another clear indication that, like what has been stated above, rules may vary from site to site and the currency to be used in funding is not an exemption. Thus, this calls for all those people who are planning to fund projects to read specific rules and conditions which are implemented in every crowdfunding site that you encounter.
How to Start
The first step is the launching of a group’s or a person’s project. Secondly is to start a pitch wherein a person or group is allowed to describe the kind of project that they have. If in case the project has not reached the funding goal on or before the deadline, no money will be changed on hands ever. Take note that pledges are usually made through credit cards and if a person is funding a specific project, his credit card will not be charged unless the project is specifically funded. And for you to know if your project is being noticed or not, you need to visit IndieGoGo and Kickstarter to see other crowdfunding projects out there that are competing with one another.
In crowdfunding, passion and a clear vision are well-noted. You will simply get most of the activity from start to the end of the campaign or project but you have to take note that you should be working with your goals all throughout.
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