With the digital revolution that has been developing in recent decades, different alternative means have emerged for the safe, efficient and effective search for financing, one of them being crowdfunding.
Also known as crowdfunding or collective financing, for the investor it functions as an optional form of investment and for the entrepreneur as an alternative source of financing.
Crowdfunding can be used for many purposes such as artists dubai email list 31062 contact leads ecuador email list 1.3 million contact leads who need support from their followers, political campaigns, debt financing, home expansion, school or university projects, mobile application development and even for the creation of new companies .
Do you want to know more about what it is, its types, how it works and learn about some success stories? Then this article is for you!
What is crowdfunding?
Crowdfunding is a collective cooperation carried out by people within a network, with the aim of obtaining money or other resources. Its operating logic is based on the idea that there are people with money who want to support the ideas of others.
However, the project itself does not seek all of the funding from any one particular person or organization.
The objective is to seek micro contributions from a large number of people to meet the requirements for the undertaking or idea that is sought to materialize.
To explain the above, I will give you a clear example:
If a thousand people support an idea that requires US$5,000, each giving US$5, the risk for investors will be dissipated and, in this way, you will have a greater chance of receiving the necessary amount.
Crowdfunding is a collaborative mechanism for financing projects that has emerged as a result of technological innovations , also known as micro-financing.
Using this definition, we can infer that crowdfunding has two main characteristics:
It is a massive union of project investors who finance projects with minimal contributions;
has low investment risks.
With the use of the Internet and the monetization possibilities offered by social networks , it is easier to get a large number of people to contribute with little money.
