{"id":46174,"date":"2021-12-30T18:31:32","date_gmt":"2021-12-30T13:01:32","guid":{"rendered":"https:\/\/www.squareyards.com\/blog\/?p=46174"},"modified":"2023-10-19T15:51:49","modified_gmt":"2023-10-19T10:21:49","slug":"what-is-crowdfunding-gly","status":"publish","type":"post","link":"https:\/\/www.squareyards.com\/blog\/what-is-crowdfunding-gly","title":{"rendered":"Crowd Funding- A Collective Way of Financing"},"content":{"rendered":"\n<p><span style=\"font-weight: 400;\">Crowdfunding is the booming way of financing any business venture by utilizing small sums of money from a large number of people. This method uses the spread-out network of people on social media and also through crowdfunding websites to unite the entrepreneurs and investors. Moreover, with the motive of enhancing entrepreneurship and investor pool expansion.<\/span><span style=\"font-weight: 400;\">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\">\n<h2>Table of contents<\/h2>\n<ul>\n<li><a href=\"#h-key-features-of-crowdfunding\" data-level=\"2\">Key Features of Crowdfunding &nbsp; &nbsp;&nbsp;<\/a><\/li>\n<li><a href=\"#h-what-are-the-types-of-crowdfunding\" data-level=\"2\">What are the Types of Crowdfunding?<\/a>\n<ul style=\"margin-bottom: 0;\">\n<li><a href=\"#h-equity-based\" data-level=\"3\">Equity-Based<\/a><\/li>\n<li><a href=\"#h-reward-based\" data-level=\"3\">Reward-Based<\/a><\/li>\n<li><a href=\"#h-donation-based\" data-level=\"3\">Donation-Based<\/a><\/li>\n<\/ul>\n<\/li>\n<li><a href=\"#h-working-of-crowdfunding\" data-level=\"2\">Working of Crowdfunding<\/a><\/li>\n<li><a href=\"#h-advantages-of-crowdfunding\" data-level=\"2\">Advantages of Crowdfunding<\/a><\/li>\n<li><a href=\"#h-disadvantages-of-crowdfunding\" data-level=\"2\">Disadvantages of Crowdfunding<\/a><\/li>\n<li><a href=\"#h-faqs\" data-level=\"2\">FAQs<\/a><\/li>\n<\/ul>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-key-features-of-crowdfunding\">Key Features of Crowdfunding<span style=\"font-weight: 400;\"> &nbsp; <\/span><span style=\"font-weight: 400;\">&nbsp;&nbsp;<\/span><\/h2>\n\n\n\n<ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Crowdfunding provides the investors with a pool of project choices and investment options for as low as $10.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Crowdfunding platforms utilize a certain percentage of the collected funds to attain revenue.<\/span><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-are-the-types-of-crowd-funding\">What are the Types of Crowd Funding?<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-equity-based\">Equity-Based<\/h3>\n\n\n\n<p><span style=\"font-weight: 400;\">In equity-based crowdfunding, the investors get to be the part-owner of the venture by giving capital in exchange for the equity shares. The equity shareholders get some financial return which is on the basis of their proportionate contribution. And this stands out to be one of the most popular kinds of crowdfunding.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-reward-based\">Reward-Based<\/h3>\n\n\n\n<p><span style=\"font-weight: 400;\">This type of crowdfunding involves raising funds in exchange for a reward which is usually a product or service from the business in which the funds are invested.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-donation-based\">Donation-Based<\/h3>\n\n\n\n<p><span style=\"font-weight: 400;\">Donation-based funding is about asking masses of people to contribute or donate a small sum for a project or business venture without expecting any reward or shares.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-working-of-crowdfunding\">Working of Crowdfunding<\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">For crowdfunding, people use vast social networks, crowdfunding platforms, and crowdfunding websites to generate funds by displaying the story, motive, objectives of the business venture or the project. In India, equity-based crowdfunding does not have a legal stance, but peer-to-peer crowdfunding is kept in check by the RBI.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-advantages-of-crowdfunding\">Advantages of Crowdfunding<\/h2>\n\n\n\n<ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A swift way to raise funds without having to pay any fees.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Attracts media attention and great marketing results because of the display of business ventures on social media platforms.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A way to get the right guidance and expert advice as the businesses are<\/span> <span style=\"font-weight: 400;\">open to a public audience.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You can get to know the reaction of the public, which will help in the betterment of the project or business.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Tracking business progress will be easy for investors.<\/span><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-disadvantages-of-crowd-funding\">Disadvantages of Crowd Funding<\/h2>\n\n\n\n<ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This will not be as easy as the traditional ways of fundraising.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If the funding target is not achieved, you might have to return the promised capital to the investors.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Failed attempts can harm your business\u2019 reputation.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If the project does not have a patent or copyright, it is at the risk of piracy.<\/span><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-important-real-estate-terms-you-should-know\">Important Real Estate Terms You Should Know<\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>National Building Codes<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/national-building-codes-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What are National Building Codes<\/a><\/td><\/tr><tr><td>Building Bye-Laws<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/building-bye-law-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Building Bye-Laws<\/a><\/td><\/tr><tr><td>Construction Loan<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/what-is-construction-loan-for-home-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Construction Loan<\/a><\/td><\/tr><tr><td>Benami Property Transaction Act<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/benami-property-transaction-act-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Benami Property Transaction Act<\/a><\/td><\/tr><tr><td>Balloon Payment<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/what-is-balloon-payment-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Balloon Payment<\/a><\/td><\/tr><tr><td>Bare Shell and Warm Shell<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/bare-shell-and-warm-shell-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Bare Shell and Warm Shell<\/a><\/td><\/tr><tr><td>Capital Gains Tax<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/capital-gains-tax-ptax\" target=\"_blank\" aria-label=\" (opens in a new tab)\" rel=\"noreferrer noopener\" class=\"ek-link\">Capital Gains Tax<\/a><\/td><\/tr><tr><td>Common Areas in Apartments<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/common-area-in-buildings-apartments-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Common Areas in Apartments<\/a><\/td><\/tr><tr><td>Commencement Certificate<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/what-is-commencement-certificate-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Commencement Certificate<\/a><\/td><\/tr><tr><td>Carpet Area<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/carpet-area-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Carpet Area<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-faqs\">FAQs<\/h2>\n\n\n\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>Can you crowdfund money for free?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\n\n<p>No, there are no free websites for fundraising.<\/p>\n\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>Why is crowdfunding a bad idea?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\n\n<p>Crowdfunding, if failed, can harm the business or project as the ideas and objectives are open to the public.<\/p>\n\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>Do you need to pay back the crowdfunding money?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\n\n<p>If the money is raised through donation crowdfunding, you do not have to pay the money back.<\/p>\n\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>Is it illegal to raise funds for yourself?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\n\n<p>There are no such regulations.<\/p>\n\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\n<script type=\"application\/ld+json\">\n\t{\n\t\t\"@context\": \"https:\/\/schema.org\",\n\t\t\"@type\": \"FAQPage\",\n\t\t\"mainEntity\": [\n\t\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"Can you crowdfund money for free?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\n\n<p>No, there are no free websites for fundraising.<\/p>\n\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"Why is crowdfunding a bad idea?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\n\n<p>Crowdfunding, if failed, can harm the business or project as the ideas and objectives are open to the public.<\/p>\n\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"Do you need to pay back the crowdfunding money?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\n\n<p>If the money is raised through donation crowdfunding, you do not have to pay the money back.<\/p>\n\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"Is it illegal to raise funds for yourself?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\n\n<p>There are no such regulations.<\/p>\n\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t\t\t\t]\n\t}\n<\/script>\n","protected":false},"excerpt":{"rendered":"<p>Crowdfunding is the booming way of financing any business venture by utilizing small sums of money from a large number of people. This method uses the spread-out network of people on social media and also through crowdfunding websites to unite the entrepreneurs and investors. Moreover, with the motive of enhancing entrepreneurship and investor pool expansion.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [&hellip;]<\/p>\n","protected":false},"author":31,"featured_media":46180,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[216],"acf":[],"_links":{"self":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/46174"}],"collection":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/users\/31"}],"replies":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/comments?post=46174"}],"version-history":[{"count":6,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/46174\/revisions"}],"predecessor-version":[{"id":92136,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/46174\/revisions\/92136"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/media\/46180"}],"wp:attachment":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/media?parent=46174"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/categories?post=46174"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}