Getting financing has always been one of the challenges of any entrepreneur. Today there are different alternatives to traditional routes, but they can be just as effective. Collective financing is one of them and in Hispanic Entrepreneurs We present you some of the crowdfunding platforms to boost your business.
What is crowdfunding
Until a few years ago, any entrepreneur who needed financing obtained it through credits, loans, government programs, among others. All of these alternatives meant few people or organizations committing a large amount of money.
But to these have been added new options driven, especially, by technology and the use of the Internet. This is where crowdfunding appears as Clarksville Financing Alternative. This term refers to a method of crowdfunding that is available through the Internet.
The entrepreneur publishes his project on one of the available platforms. Investors decide whether or not to contribute money and how much they want to support.
The companies or people who decide finance third party projects They can do it through donations, loans or investments.
The scheme under which they work is basic, although in some cases it will be easier than in others. The interested party registers on the platform and presents a project, describes what it is about and the amount of money they need.
Then, the platform or the community itself evaluates it and, if the evaluation is positive, then it is published and promoted. A time is set to collect the money and in the end it is determined if the necessary financing has been reached.
Types of crowdfunding
There are different types of crowdfunding. Among the best known are the following:
- Loan crowdfunding. They are those in which an entrepreneur requests a certain amount of money for his project. The platform analyzes viability and risk levels. Likewise, it determines the interest that you will have to pay if you get the financing. If they approve the project, the lenders decide to support it or not. And the borrower agrees to pay the debt and interest.
- Investment crowdfunding. In this case, the entrepreneur offers shares in his company in exchange for financial support. This type is more convenient than the previous one for businesses that are in their early stages because they do not compromise their income. And if they are successful, investors will receive part of the profits.
- Reward crowdfunding. It is one of the best known and consists of delivering a reward in exchange for the contribution. The remuneration can be a sample of the product or service offered by the entrepreneur.
- Donation crowdfunding. Unlike the previous ones, in this case the donor does not receive anything in return. It is mostly used by non-profit organizations.
Crowdfunding platforms to boost your business
Crowdfunding is a financing scheme that has grown a lot in recent years. In 2012, around 2700 billion dollars were mobilized on these platforms. By 2015 the amount had risen to 34 million. And by the end of 2019, the figure is estimated to exceed 100 million.
This means that it has become an efficient way to raise funds for companies. Projects of any kind can obtain the resources they need through crowdfunding. But, the conditions to obtain it will depend on each site in particular.
Some platforms are dedicated exclusively to loans or investments. There are also those dedicated to a particular sector, such as technology or health projects. To get the one that suits you best, research each one and ask for recommendations. Among those you will find available are the following:
KickStarter
It is one of the best known sites and can publish projects of any kind. If you know how to get investors' attention, you will have a good answer. To receive the money raised, you must reach the estimated figure for the project. So you have to make sure you do a good promotional campaign and be very descriptive when talking about your idea.
Indiegogo
It is another of the recognized platforms in the United States and also accepts projects of any kind. However, those that have to do with innovation and technology are preferred in Indiegogo.
If you decide to publish your project on this platform you can choose to withdraw the funds even when you have not reached your goal. But it also offers the same “all or nothing” alternative as Kickstarter.
GoFundMe
Another of the best known. It has been used not only for companies, but to raise funds for different purposes. For example, for medical emergencies.
Rockethub
It is a good support platform for small businesses. By registering your business you set the moment you need. And if you do not reach the goal it allows you to find other funds.
Funding Circle US
This site allows you to obtain loans to grow your company. The platform will set the interest rate you must pay. Using this platform may be more convenient if you already have a business that generates profits to ensure that you can meet the payment when obtaining the loan.
In addition to these crowdfunding platforms to boost your business, there are many others that you can turn to. For example MicroVentures or TechMoola. Evaluate each option and choose the one that suits you best. Do you need advice to grow your business? Contact us.
