Here are 4 common types of CrowdFunding platforms
Each come with their own set of rules and obligations
You will need to find the best one that suites your situation
There are more but these are the most popular:
- Lending (Peer to Peer)
Donation based websites allow you to raise money without you having to pay back anything in return. People support you because they like what you do.
Rewards based websites allow you to offer a reward in return for a contribution. You can offer more rewards for larger contributions.
Equity based websites allow you to sell a stake in your company to the crowd. Those that contribute expect a return on their investment.
Lending based websites allow interested investors to offer you an interest bearing loan. You will have to pay the money back at an agreed interest rate over a period of time.
You will also notice that each website will normally emphasise a particular discipline
- renewable energy,
- real estate and much more..
There are many websites however that do not specialise and cover general topics.
There are also some CrowdFunding platforms that offer a combination of Donations, Rewards, Equity and Lending all from the same website
- Donations and Reward based platforms are usually good for raising smaller amounts of say between 5000 and 10 000 dollars or pounds.
- Typically Equity and Lending platforms are good for raising larger amounts of 50 000 dollars or pounds more.
- For larger amounts it is normally best to choose a platform that is based in your own country although there are many international platforms to choose from.