A Brief Guide to Crowdfunding Normal People
Crowdfunding is all the rage, with new platforms have sprung up ever more frequently. Many consider it to be the future investment, others warn that the risks are often underestimated. And then there are various types of crowdfunding: reward-based, equity, debt-based, flexible, fixed, and so on. To get reviews on various crowdfunding platforms, you may click here.
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The most important benefit of crowdfunding is that it makes investments in small companies and startups accessible to everyone. For this reason, it is more important than ever for people to understand this new world, as most of the negative publicity around crowdfunding largely focused on the misuse and misunderstanding of the platform.
Ordinary, everyday people. And that's what the "people" are referring to crowdfunding. You see, raising money is not really about the business plan or market traction or financial forecasts: it is ultimately about trust. And in life, the higher the risk of being hurt, the trust is more important to be.
For this reason, most people do not mind putting a few pounds towards sponsoring a charity run or loan a friend a few pounds; there is a general acceptance that you should not expect to see that money again, and as such the level of trust people to whom you give the money does not need to be very high.
Enter the Internet, with an established history of both removing administrative headaches and connecting large groups of people together. Crowdfunding essentially facilitates matchmaking between ordinary people who are interested in investing in things and founders of the ordinary that do not happen to have access to a large network of collateral or rich people.