Kamis, 23 April 2015

Crowdfunding Is a Child of the Social network Revolution

Crowdfunding turns round the traditional concept of seeking big dollars from a single source in order to seeking much smaller sums through many sources and using the network to achieve this.

The internet causes this a simple process...

In principal you place up a profile of your task on a website and use social networking, alongside your personal network associated with friends, family and work colleagues, to raise the money.

In the common free-for-all that is the internet this particular offers criminals an opportunity to create a fast buck. You must utilize Crowdfunders authorised with the monetary authorities within their (the Crowdfunder's) jurisdiction and even then very carefully consider the risks involved

We are able to identify 3 basic crowdfunding models

Reward Based Crowdfunding
The investor's reward might have no or little inbuilt value. He (or she) does not anticipate any severe return on "investment". This may best be viewed as the donation rather than an investment.

Financial loan Based Crowdfunding

within that we can identify two modelsRevenue Participation - the trader receives a percentage of product sales for a fixed period. There is absolutely no repayment of the loan primary.

Interest Based - the actual investor receives a fixed attention payment for a fixed time period. At the end of the loan time period, the loan is to be paid back in full. Equity Based Crowdfunding
The investor gets stocks in the business in which they are trading. The investor is taking same risks as you are and could reasonably demand Due Diligence prior to investing.

Crowdfunding Platforms
The Google search for Crowdfunding Systems produces 845 thousand strikes. Not all of these will be appropriate and many will not be honest, at least well enough directed to be worthwhile parties to you as an trader. Some will be regulated -- perhaps not as a crowdfunder but as Investment Advisors, Attorneys etc which give them trustworthiness.

Use a professional to guide you with the selection process!
Whichever option you utilize, having many 'funders' produces an administrative load which you might not need at a time when your period is valuable. Different systems provide different services which means you need to be very careful how you improvement your project, choosing one that offers the facilities you need, now as well as into the future.

It is possibly true that the legal as well as regulatory authorities are driving the curve when it comes to some thing as new and as powerful as Crowdfunding, but remember, you might be subject to the general legal atmosphere of your home country and, possibly of the countries in which your own investors are registered. Particularly, the 'consumer protection' laws of both countries might apply.