These are crowdfunding campaigns in which patrons crowdfunding are receive a non-monetary return as a reward for their contribution. In other words, they do not recover the money invested, but they do receive another type of reward.
Loan Crowdfunding
This is a type of crowdfunding in which the money that investors have contributed to the project is returned to investors, with or without interest. Debts incurred through crowdfunding campaigns differ from bank loans in their size: instead of signing a large loan with a single creditor, you turn to many small lenders who contribute smaller amounts of money. This way, the risk for them is also lower.
The fact that there is a monetary return basic image editing services does not necessarily mean that the interest of the patrons is less or less altruistic. In the vast majority of cases, they will lend their money because they identify with the project and want it to succeed. Therefore, cultivating relationships with investors is just as important in this type of crowdfunding as in the others.
Sometimes crowdfunding campaigns complement loans, and some banks promote this combination. For example, the Triodos Foundation has its own crowdfunding platform .
Investment Crowdfunding
Equity crowdfunding, also known as equity crowdfunding , is another type of micro-financing that has a material return. In this case, investors become owners These advances are already bolstering use of a small part of the company they are financing, receiving shares or becoming capital partners. When the business goes ahead, they will receive the corresponding profit distributions and will normally be able to participate in decision-making.
This type of crowdfunding is quite widespread in the Anglo-Saxon world, where there are specialized platforms such as Fundable .
Advantages and disadvantages of crowdfunding
Crowdfunding is a particular form of financing that has its advantages and disadvantages.
Strengths of crowdfunding
The main advantages of crowdfunding as a form of financing are the following:
Weaknesses of crowdfunding
Crowdfunding also has its limitations quick signs as a form of financing. Here are the main drawbacks of crowdfunding to finance a business:
Crowdfunding platforms to finance a business for entrepreneurs
The development of crowdfunding is linked to the Internet for obvious reasons: it is the most effective channel for reaching large numbers of people. Virtual platforms allow you to raise funds online for microfinancing campaigns. Here are three crowdfunding websites that you can use to finance a small business.