Why anyone looking to raise funds for their startup, projects or for any social cause should consider Crowdfunding before looking for other alternatives?

Crowdfunding is relatively a new concept of getting funds for your new startup, projects, and products or for any social cause that you strongly feel about. It has gained popularity in the last 10 years and has become the prominent choice of raising funds for many budding entrepreneurs. 

It is not only used by people who are starting for the first time and looking for the funds but it has consistently been used by the big companies to build a customer base, pre-launch a product or advertise their product and services and at the same time see the market response and analyze their offerings to hedge for any risks in the future during actual product launch. 

In 2013, Forbes estimated that Crowdfunding grew to be about $5.1 Billion. Kickstarter, one of the biggest players in Crowdfunding alone had $529 Million raised in 22,252 projects with 3.3 million people funding for the projects. 

The top crowdfunding platforms currently are Gofundme, Kickstarter, Indiegogo, Teespring, Youcaring.

Before looking for the right platform online to raise funds, you need to understand the different business models of crowdfunding and which business model is the best for your project.

Crowdfunding models are broadly divided into two categories-

• Community Crowd-funding 
• Financial Return Crowd-funding

The models such as Donations, Rewards, Pre-Sales, Lending, Equity Crowfunding, Hybrid fall into one of the categories mentioned above. 

To know in detail about all these models and which model is best suited for your project, please refer to out complete report on Crowdfunding <Crowdfunding-link>

There are various sources of raising funds other than online corwdfunding platforms such as through venture capitalist.

The venture capitalists who infuse money in your project takes a significant part of the business and also raising funds for a social cause or any social issue is not possible. 

Moreover, to convince venture capitalists is a different ball game. You need to understand the in-out of your business including the legal aspects of it with the proper financials, showing how your business is going to make money in the due course of time. 

It has been seen that most of the projects that achieve success through crowdfunding platform, in the long run requires a support from venture capital for business expansion. So, even if you are sure of getting funds through venture capital than choosing crowdfunding for the initial stages of your business would make a huge impact in determining the success of the project by helping you to build a customer base, understand and analyze the customers’ response and hedge for any perceived risks in the future. 

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