HomeFinanceWhat is crowdfunding?

What is crowdfunding?

Allowing anyone to inject money into a project or business, the crowdfunding system emerges through fundraising campaigns. In this way, people interested in the product or service can help financially while receiving the most varied rewards. If you want to know more about this world, come with me and learn what crowdfunding is.

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Getting investment and recognition from large companies is not easy. The level of competition is huge, forcing people to look for other ways to finance their projects. This is where presenting the product or content directly to the end consumer can be a valid alternative.

Crowdfunding (or crowdfunding) provides the opportunity for direct contact between producers and customers. Thus, it is possible to collect a value in advance that will help in the production of the item. This value can be anything from something symbolic to a high amount of money. Typically, all funding is done by ordinary people who like the company or have a keen interest in the promised product.

Through platforms like IndieGoGo or Catarse, users can prepare the entire presentation to catch the attention of visitors and potential investors. With this, value goals are created to excite users and also set financial limits on what is possible to deliver at the end of the campaign.

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For the person who wants to offer their support, just enter a project page and carefully read the goals, information and values. Then, it remains to define a form of contribution such as a credit card, for example.

Types of crowdfunding

There are three main forms of crowdfunding:

  • Punctual: This type of collection has a closing date. In this way, the project owners set a goal and wait for people to be interested and offer money. Games, clothing, books, etc. are popular examples of point model;
  • Recurring/ Subscription : With this campaign, the project is never closed. The idea is to keep work alive and frequent with the help of people. Payment is often monthly. Podcasts, internet videos, etc. are common examples;
  • Solidarity: The purpose of this type of crowdfunding is exclusively the donation to help some cause. In this way, the award ends up being less physical and more intimate, as it focuses on the feeling of being part of a group that helps other people and projects.

risks and rewards

While directly helping a campaign you believe in can be extremely satisfying, there are risks that shouldn’t be ignored.

  • Many projects take a long time to deliver to their supporters;
  • Some projects end up disappearing, never actually being launched;
  • The final product may not be as good as it was presented to the public.

On the other hand, when all goes well, there’s a lot to smile about crowdfunding. Some of the advantages are:

  • Receive an exclusive-looking product because of the small print run;
  • The feeling of having been an active part of the whole process;
  • Supporting something you believe in and like;
  • Treats like unique items, name in credits, and community membership.

There may be more examples of the risks and rewards of crowdfunding, but the ones mentioned above cover much of what is to be expected.

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Is it worth using crowdfunding?

If you are a content producer or have a project in your hands that you really believe in, thinking about raising investment through supporters can be a good choice. You have much greater creative control of the entire process, from start to finish. However, this also brings with it many responsibilities.

Therefore, it is necessary to plan everything very well. Having a clear notion of values ​​to guarantee production and delivery is very important because if something goes wrong, the reputation of the project and those involved will be at risk.

It is also relevant to understand how the crowdfunding platform you are using works. Most of them demand a percentage of what was collected. Take this into account when defining your plan.

Overall, the idea of ​​crowdfunding is a modern good that can be very useful. Are you interested in making use of crowdfunding? What kind of project would you like to focus on? Tell us!

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George Philip
George Philiphttps://betechwise.com
George Philip is a seasoned tech professional with a deep-rooted passion for all things tech-related. His mission is to demystify complex tech topics and provide you with the insights and knowledge you need to navigate the ever-changing world of technology. With a keen eye for detail and a talent for making the intricate seem simple, George crafts engaging content that explores how technology impacts your daily life, your workplace, and the broader global landscape. Whether you're eager to stay updated on the latest gadgets, intrigued by emerging tech trends, or simply looking to understand how digital innovations shape our world, George's writing is your trusted source for clarity and expertise. Feel free to reach out to George via email at [email protected] for inquiries, collaboration opportunities, or to engage in thought-provoking discussions about the fast-paced world of tech. Stay informed, stay connected, and let George be your guide in the tech-savvy universe.


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