A new form of investing
A new form of investing aspires to radically change the terms of the economic game across the globe. And the name of it? “Crowdfunding”, is attributed in every language as “crowdfunding” or in the aptest term “online microfinance”. Despite the fact that it has been operating for a short period of time, it has already recorded success stories. Thousands of inspired designers, entrepreneurs, artists, charities, merchants, and even farmers, have come up with innovative ideas for expanding their businesses. Moreover, through “crowdfunding” the crowd ceases to be a discredited mob and is transformed into an active community that discovers the ideas that are worthwhile, and participates financially in them.
In September 2010, when Apple announced the launch of the 6th generation Nano iPod, a tiny device just 3.9 inches wide and 16 GB in size, Scott Wilson, an American watch designer at Nike, was inspired by the product. In addition, “LunaTik” designed an original wristband, all in common with the watch with only one difference: in place of the watch, there would be a special case to fit the new Nano iPod. Mr. Wilson was convinced that his idea would make him rich. There was a problem. No investor seemed to be convinced that the idea was worth financing. Weeks passed and Mr. Wilson lost his temper.
He then had a brilliant idea. He decided to “upload” his idea to www.kickstarter.com, where any user can present a business plan and request funding. Initially, his goal was to raise $ 15,000 in 30 days. At the end of the deadline, he had raised… 942,578 dollars from the contributions of 13,512 internet users!
The use of Crowdfunding
It is a widely used method of financing a project or even a simple idea for a new product. There are dozens of CrowdFunding websites around the world that operate as capital markets. These undertake to bring together funders and creative people looking for funds to market their ideas. You will be amazed at the size of this market today. Usually, Crowdfunding websites charge 4-5% on the funds raised.
The projects that can be funded range from technology startups and charitable initiatives (non-profit) to personal needs, and anything else you can imagine. Contributions to online microfinance are governed by the inviolable rule of “whatever you enjoy”. That’s why they range from $ 1 to over $ 1,000, while the vast majority of users deposit around $ 20-50. The money is disbursed only if the total amount is collected, otherwise, it is returned to the micro-investors. In addition, as far as the exchanges of the investment, range from the sending of products, tickets, and internet applications to the provision of shares of the newly established company, which are leveraged as a reward to the potential investors.