Types of Crowdfunding to watch out for
As i noticed that the rewards for the direct posting through #proofofbrain front-end are much more higher than those made from the integration of plugins to website.
Today's post by @vempromundo made it even clear that he would curate only those posts which are posted from this front-end and generate engagement. In recent posts i understood that my posts are generating the engagements but were not posted through this front-end.
Hence, i am making my post on financial concepts through this front end. Today's post is about crowdfunding.
History of Crowdfunding
Crowdfunding is not actually a new concept. In the 18th century, writers and musicians were collecting money from many investors to spread their creations across the societies. Crowd funding is now similar to non-government organizations gathering aid to build schools or to carry out a social project, such local communities can now reach a larger audience with the contribution of the Internet. It is said that it is an updated version of the traditional fundraising process.
(Image Source: Google)
Definition of Crowdfunding
Crowdfunding is raising small amounts of money from large number of small investors. Crowdfunding, is a new investment trend in the world, has been introduced as a way to help small businesses and entrepreneurs looking for investment capital to remove their business ventures from scratch.
(Image Source: Google)
Types of Crowdfunding
- Donation-Based Crowdfunding is a way to fund a project by asking a large number of participants to donate a small amount.
- Reward-Based Crowdfunding involves identifying rewards at different levels corresponding to collateral amounts. A standard reward campaign offers at least three levels of collateral/reward.
- In peer-to-peer (P2P) or Debt Based Crowdfunding system, start-ups borrow money from several people online and pay them back after the project is over.
- In the Lending type of Crowdfunding System, entrepreneurs created a periodical fund in the form of loans they would repay to lenders on a predetermined timeline with a set interest rate.
- In the Equity Crowd Funding system, investors invest in a company that is not quoted on the Stock Exchange in exchange for equal rights in the shares of the shareholders.
I never knew there were so many types of crowd funding, do you think there is a "best" model?
Good one posting from the proofofbrain front end. Keep it up
Seems like crowdfunding has really upgraded to the internet age now. You can make donations from any where around the world now unlike before.
Nice post. It was nice to read this post 😊
In my mind the creation of the PoB mechanism is a new P2P/Reward-based hybrid from of crowdfunding that really incorporates aspects of all the forms of crowdfunding. Today crowdfunding platforms like gofundme are often used to help people through tough situations, very similar to @dan Larimer's vision of a mutual aid society which has evolved into the platform we are currently using.
@proofofbrainio the initiative you have started is really engaging and is helpful to the mankind. I read couple of stories of the people from Latin America having made enough money to sustain on this platform. Its a real and the best example of crowdfunded platform where the users are coming together to support the skill of blogging or writing or even in support of certain thoughts.
I knew crowd funding concept in general but did not know this is so old.
There are a lot of different type too. I only knew one time.
Thanks a lot for sharing this information
Take care and have a good rest of the day
I am not a big fan of donation based funding when its for a for-profit venture. The donors end up paying twice.
I am not sure i understand correctly. How would donors end up paying twice when its a for-profit venture. In the equity model you get a small equity or a right to sell something. Say for example, if you are developing an app to be sold on Apple iStores. Now when you crowdfund the development of app then you probably get the revenue rights from say installs starting from 1000 to 2000. This is a very innovative mechanism of funding. However, there is another dark side to this. Crowdfunding is becoming a tool for money launderers.
You donate to a company that is developing a treatment for X. Then if you need that treatment you have to pay as much as the people who never donated anything to anything. That's paying twice because they don't credit it to you.
Getting revenue rights means its not a donation. I think that's a good idea. It rewarsd those that contribute. But it also makes you a target of overreaching government agencies in the US.
It's good to see you posting through the community's front-end, but just a correction: I don't give votes just to post on the front-end, but I do give priority. Usually the amount of votes on the day ends before I vote everyone who used the front-end, thus not being able to reach the others who posted elsewhere.
He still keeps curating everyone, it's just the way the queue is organized. By the way, today's full vote goes to you.
I am really overwhelmed. Thank you for this vote.