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What is Crowd funding? Features,benefits and types.


Crowd funding is a method of raising capital through the collective effort of friends, family, customers, and individual investors.

This approach taps into the collective efforts of a large pool of individuals—primarily online via social media and crowdfunding platforms using their reach.

What is the main purpose of crowd funding?

Crowd funding is done for social help, help for needy people ,startup etc.

Crowdfunding is essentially the opposite of the mainstream approach to business finance.

Traditionally, if you want to raise capital to start a business or launch a new product, you would need to pack up your business plan, market research, and prototypes, and then shop your idea around to a limited pool or wealthy individuals or institutions.

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These funding sources included  banks, angel investors, and venture capital firms, really limiting your options to a few key players.

What are the various types of Crowd funding?

Just like there are many different kinds of capital round raises for businesses in all stages of growth, there are a variety of crowdfunding types.

Which crowd funding method you select depends on the type of product or service you offer and your goals for growth.

The 3 primary types are donation-based, rewards based, and equity crowd funding (this guide will focus mostly on rewards-based and equity).

What are the precautions one should take before participating in crowd funding?

According to the Cyber Security Consultant Ayush Bhardwaj , don’t share your details on similar websites while crowd funding.
Don’t save your credit card details on the website.
Always chose the right website link for crowd funding.
Lock your credit card international use before crowd funding.

How is crowd funding helpful for people amid COVID situation?

CEO of fundraiser ,Darel Haiten stats that his company has raised 175 million US dollars for the help of needy people by campaigning through Instagram and Facebook.

Recently, a boy needed 16 crores for medical emergency ,able to collect 15 crores via crowd funding.

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