What exactly is crowdfunding?
Crowdfunding is an approach that seeks help from a community of people to raise funds for a particular project. When someone donates their money are aware of the purpose and why they’re giving money. If we define the concept of crowdfunding using a simple definition that is, it’s the process of raising small sums from a variety of people for an individual project, social, or business venture.
Crowdfunding provides a platform for regular people to assist you in making your dream become reality. Here you list your project. He will tell you the amount needed to complete the project. After that, anyone who is interested in your work will donate money.
Types of crowdfunding
Crowdfunding based on equity
Equity-based crowdfunding donors make large investments of funds. The purpose of this type of investment is to generate large profits for startups. Equity-based crowdfunding is used to boost the growth of the business. This kind of crowdfunding is prohibited in India.
In India crowdfunding platforms are only available to SEBI registered companies. This means that companies can raise as much as Rs 10 crore per year. Due to the risk of this new method of raising money, SEBI has proposed that only investors with a valid license will be able to participate in the crowdfunding process.
Market-listed companies as well as companies associated with the real estate and financial industry will not be permitted to participate in the process.
Reward the best crowdfunding
In this kind of crowdfunding, the business gives the donors rewards. If, for instance, your mobile app is an entrepreneur, you must provide mobile rewards to your donors at the end of the campaign. This kind of crowdfunding is legal in India.
Donation crowdfunding
In crowdfunding for donations, the person contributes any amount for any noble cause that is chosen by his preferences. In this type of crowdfunding, the donor is not rewarded with any compensation.
In this kind of crowdfunding, the individual makes donations from the heart and is legally legal in India. It has become a very popular method of raising funds to support social welfare. Candidates or political parties can also make donations through donations crowdfunding.
Crowdfunding for debt
With debt crowdfunding, an investor invests in the safety of a firm. The goal of crowdfunding is to make cash. In this, the business gives an interest rate.
Benefits of Crowdfunding
•It is a great way to learn about innovative ideas
•It is a catalyst for numerous new businesses that are starting up across the country.
•Crowdfunding can help in promoting peace and harmony in the aftermath of natural catastrophes.
•It also helps in helping to arrange funds for vulnerable people who are unable to pay the expense of serious illnesses such as kidney transplants, cancer, and so on.
•The most appealing aspect of crowdfunding on the internet can be that it helps make fundraising effective and easy.
India’s top crowdfunding sites
Ketto
The platform has already received funds above 1100 crores. Ketto was the very first peer-to-peer platform built on donations. Ketto is among the most trusted crowdfunding platforms in Asia.
The site is visited by around 1.5 million users each month. Ketto is ranked number one on the list of top crowdfunding platforms in India. Ketto charges 5-8% or about 30$ approx.
Milaap
Milaap Crowdfunding platform Milaap is well-known in India. It was created in the year 2010 by young and enthusiastic entrepreneurs. Milaap aims to raise money for education, health care, and disaster relief, sports, and other personal causes across the country.
Milap has launched a crowdfunding platform that provides micro-loans to those living who live in rural regions. It has financed 15 million in the first month and has had over 50,000 successfully financing campaigns so far. Milaap takes 5-8% commission on a successful funding campaign.
Impact Guru
Impact Guru was founded in 2014 by Khushboo Jain and Piyush Jain in Mumbai. Particularly, it focuses on crowdfunding for non-profit organizations. Impact Guru takes 5% commission for the success of crowdfunding.
FuelADream
FuelADream This Company was founded by Ranganath Thota in April 2016 in Bangalore. It’s a donation-based crowdfunding platform. It can run about 20 kinds of campaigns each month. It also pays 10% of the commissions for running an efficient crowd-funding campaign.
Faircent
This is an Indian company. It was created in the year 2000 by Rajat Gandhi Vinay Mathews Nitin Gupta. Its headquarters are located in Gurgaon and around 15 lakh visitors visit its website each month. More than 6000 investors are invested in the company.
Rang-de
This platform was established by Smita Ram and Ram NK in 2008 in Bangalore. It is a peer-to-peer micro-lending platform that operates upon the Internet. It offers small or low-cost loans to people in India. More than 93% of people who receive the loans are women. It is a not-for-profit crowdfunding platform that has attracted more than 15000 investors to date.
Rang-de has succeeded in accumulating a fund of 7 million dollars and has also granted the investors loans. Some people are unable to secure loans from another source the rate of interest has ranged from 4.5 percent to 10 percent. Rang-de is found in approximately 20 states in the United States and includes more than 30 branch locations throughout the nation.
Wishberry
Wishberry is an Indian business that was founded in the year 2010 by Priyanka Agarwal and Anshulika Dubey in Mumbai. It is a charitable crowdfunding platform similar to FuelADream.
In this, over 11000 investors have backed the platform in more than 60 countries. If it has a successful crowdfunding campaign, then it will take a mere 10 percent commission.
BitGiving
It was created on the 13th of December 2013 by Ishita Anand from New Delhi; its 15 percent crowdfunding competition is only tied to medical treatments. It has hosted more than 1000 successful competitions to date. BitGiving receives 6-9% commission for successful campaigns.
World-renowned crowdfunding websites
Kickstarter
Kickstarter is an organization for public benefit located within Brooklyn, New York that was founded on April 28th in 2009, by Perry Chen, Yancey Strickler, and Charles Adler. To date, it has received funding as high as $ 2 billion.
If you manage to collect an amount that is successful through this platform, Kickstarter is charged 5 percent of the funds. If for any reason, your campaign fails to raise funds, Kickstarter does not charge any commission.
GoFundMe
GoFundMe is an American business headquartered located in Redwood City, California, the United States This Company was established on the 10th of May 2010, by Brad Damphousse and Andrew Ballester.
Brad Damphousse and Andrew Ballester launched a website named CreateAFund in 2008 and later changed its name to GoFundMe and added a few features. So far, it has raised over five billion dollars in funds. The site does not charge commission on campaigns that are running in the USA however it the company charges 5% of the money for campaigns running across other nations. GoFundMe is a fund-raising platform that collects funds in 19 countries.
Indiegogo
Indiegogo is an American company with its headquarters located in San Francisco, California, United States This Company was established on January 1, 2008, with Slava Rubin Danae Ringelmann and Eric Schell.
The website is among the first crowdfunding websites around the globe. It costs 5% of the amount for funding campaigns similar to other sites with a total of 14 million people visiting the site. Indiegogo has succeeded in securing funding of approximately $2 billion in the first few months.
CircleUp
CircleUp was created with Ryan Caldbeck and Rory Eakin in April 2011and is an American firm, and was officially launched in the year 2012 and its headquarters are found within San Francisco, California, United States. A total of 25 thousand visitors per month visit the website. It has accumulated the sum of 350 million as of now.
Patreon
Patreon is an American company founded by two musicians Jack Conte and Sam Yam in May 2013. Head-Quarter has its headquarters in San Francisco, California, United States. The website is visited by more than 100 million monthly visitors. Patreon boasts 3 million monthly active patrons. As of August 2013 the company had raked in $2.1 million within three months since the company’s creation.
