Finance your projects with crowdfunding!

Financing an idea is now easier thanks to crowdfunding, which is establishing itself as an alternative tool to that of bank financing to give substance to one’s ideas.

Financing an idea with crowdfunding
Collective financing is in fact a financing that starts from the bottom and allows the new entrepreneur to submit their idea to a wide audience of potential investors who can decide to support and finance it.

Crowfunding therefore amplifies and replicates what is the first stage of entrepreneurial activities, where before turning to the banking world all entrepreneurs rely on their money and that of friends and family.

This tool, which is often based on internet platforms, therefore broadens the base of potential supporters of our idea, who are therefore not just suppliers of capital, but turn into real partners and sponsors and allow us to finance our idea with the crowdfunding.

In this article
What is Crowdfunding?
What ideas can be funded?
How does it work?
What are the most used platforms?
What is Crowdfunding?
The crowdfunding (crowd funding) is the collection of a small amount of capital to be a multitude of people to finance an entrepreneurial venture.

There are three parties involved:

the promoter, that is whoever presents the business idea and collects the funds;
the lenders;
the platform through which to collect the money and present the initiative.
A distinction is made between:
Reward Crowdfunding, where those who invest receive in exchange a reward not in cash and above all not in shares of the initiative;
Equity Crowdfunding, where those who support the initiative become a partner and therefore invest money and become an entrepreneur himself.
In general we can say that reward crowdfunding has a much lower access capital and is intended for ordinary people, while equity crowdfunding provides for a higher invested capital and sees mostly institutional subjects as investors.

The main advantage of crowdfunding, in addition to the obvious one of raising capital, is to create a community of people who support and advertise our initiative. This is why this tool is often used as a marketing tool both to promote a project and to understand the public’s interest in a product or service.

What ideas can be funded?
In general, any type of project can be financed, especially if we are talking about equity crowdfunding.
However, given that what interests us most is reward crowdfunding, we can say that this tool is often used to finance musical and cultural projects in general, the launch of new products, sites and technological applications.
How does it work?
How reward crowfunding works is quite simple. Just register on the various sites and enter your project and the rewards you want to give to investors.

It is also decided the capital required and the duration of the collection and off we go.

Obviously, to get to insert a project you need to prepare a good description of the project, some technical material, a presentation video and all that presentation documentation that allows you to “sell” the project. Obviously, the success of the initiative depends on all this and that is why time must be dedicated, before going live with the collection.

What are the most used platforms?
The platforms are now many but the most famous, worldwide, are Kickstarter , Indiegogo, Fundable .
There is no shortage of Italian responses and, among all, Eppela and Produzioni dal Basso have managed to gain a leading role in reward crowdfunding, attracting capital also from abroad and in the case of Eppela an interesting partnership with Poste.
Instead, equity crowdfunding is struggling to take off where there are more than 10 authorized operators, but no one is able to raise important capital and above all interesting projects. This is because in our country there is still no culture of financing ideas and seed financing, with specialized operators. However, I think that even in this case it is only a matter of time and the entrepreneurial fabric of our country is very suitable for this type of initiative.

I would like to collect your experience in this field both as a lender and as a promoter of a crowdfunding funded project. I await comments!

Be the first to comment

Leave a Reply