Crowdfunding is one way of raising funds from the public or friends, family, customers, and individual investors. This approach helps in getting large number of individual investor through Social media and Crowdfunding platforms and leverages their networks for greater reach and exposure.
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. These funding sources included banks, angel investors, and venture capital firms, really limiting your options to a few key players.
Crowdfunding platform helps the entrepreneur to showcase and present the innovative idea. With crowdfunding, you get the funds from one who is interested in your project which gives them more ways to help grow your business.
Types of Crowdfunding