What is Crowdfunding Practice and How it benefits several Businesses.
                     What is Crowdfunding 
Practice and How it 
benefits several 
Businesses?
 Crowdfunding is the process by which a vast 
number of private investors jointly raise their 
funds. 
 Crowdfunding is mostly achieved online through 
social media and online platforms.
What is the 
meaning of 
Crowdfundin
g?
Source: www.thebalancesmb.com
 Crowdfunding therefore involves supporting a 
project or company by gathering small sums of 
money from several individuals, primarily on the 
Internet or on particular websites.
HOW IT 
WORKS?
Source: www.cloudways.com
 Basically there are three types of crowdfunding. 
Namely;
  Equity-Based Crowdfunding
 Reward-Based Crowdfunding
 Donation-based Crowdfunding
 Debt-based Crowdfunding
Types of 
Crowdfundin
g
Source: www.jagranjosh.com
Benefits of 
Crowdfundin
g
 Crowdfunding is an ideal alternative method of supporting a 
business, which can be achieved without giving up equity or 
piling up debt. 
 Crowdfunding sites focused on incentives encourage 
entrepreneurs to collect funds from the crowd to literally 
offer physical goods or other products.
It provides 
access to 
capital
Source: www. entrepreneur.com
 Launching a crowdfunding programme tackles these risks and is 
a valuable lesson. 
 Today's crowdfunding helps a contractor to achieve market 
validation and to stop coughing up money before bringing a new 
idea out and launching it into the market.
It hedges 
risk
Source: www.jagranjosh.com
 Active crowdfunding is a good way to bring the general mission 
and vision of the business into the market, as multiple outlets 
can be accessed free of charge and easily. 
 Many crowdfunding programmes have frameworks in the social 
web, rendering it painless for the platform and other social 
media sites to gain reference.
It serves as 
a marketing 
tool
Source: www.rockcontent.com
 It is difficult to present the investors and to persuade 
themselves that the business has been validated enough at 
an early point. But this is possible through crowdfunding.
It gives 
proof of 
concept
Source: www.projectmanager.com
 One of the greatest problems for SMEs and business people is 
to cover all the troubles an organisation could face early on. 
 The contractor is able to engage the crowd and collect 
suggestions, feedback and proposals through a crowdfunding 
campaign.
It allows 
crowdsourcin
g of 
brainstorming
Source: www.crowdspring.com
 Not only does an entrepreneur introduce an organisation 
and product with a crowdfunding programme, it helps 
them to share the message and the intent behind it.
It introduces 
prospective 
loyal 
customers
Source: www.jagranjosh.com