What is crowdfunding?

What is crowdfunding? A brief description of crowdfunding. Meaning of crowdfunding.

Crowdfunding is a method of raising funds, capital, through the collective efforts of acquaintances or strangers, friends, family, customers and individual investors. This approach uses the collective efforts of a large number of people - primarily online through social networking and crowdfunding platforms. Translated as crowd and funding. Crowdfunding - charitable fundraising by a group of people.

What is different about crowdfunding?

Crowdfunding is essentially the opposite of the mainstream approach to business finance. Traditionally, if you want to raise capital to start a business or launch a new product on the market, you will need to prepare your business plan, market research and product prototypes and then present your idea to financial institutions (e.g. banks) or investors (people with financial capability). These funding sources include banks, investors and venture capital firms, which really limits your options to a few key players.

Crowdfunding platforms, on the other hand, make this raising of seed capital easier. They provide the entrepreneur with a platform and a platform to showcase, demonstrate and share the business plan and products for which they are seeking funding. This approach dramatically streamlines the traditional model. Traditionally you would spend months going through your personal network, checking out potential investors and investing your own time and money to present yourself well to them. With crowdfunding, it's much easier to get the opportunity to showcase yourself to more interested parties and give them more ways to help grow your business, from investing thousands in exchange for equity to contributing $20 in exchange for an initial product or other reward.

Also, in addition to funding business ideas, crowdfunding can be used successfully for charitable fundraising. At the PavelAndreev.ORG donation site, this is a fact. Take a look at all our charity campaigns.

What are the benefits of crowdfunding?

From tapping into a wider pool of investors to enjoying more flexible fundraising options, there are a number of advantages of crowdfunding over traditional methods. Here are just a few of the many possible advantages, which we will explore in more detail later in this guide:

- Reach - By using a crowdfunding platform like PavelAndreev.ORG, you have access to thousands of accredited investors or donors who can view, interact and share your fundraising campaign.

- Presentation - Creating a crowdfunding campaign takes you through the invaluable process of looking at your business or charity from the highest level - its history, interactions, offerings, addressable market, donation proposal and more.

- PR and Marketing - From launch to completion, your campaign can be shared and promoted through social media, email newsletters and other online marketing tactics.

Check out our articles related to social media:

• 5 ways to spread the word about your fundraising campaign and reach more people
• How to use social media to run a successful fundraising campaign
• 10 ideas on how to promote a donation campaign on Facebook
• How to create a fundraising hashtag that inspires donations

- Concept Validation - Presenting your charity campaign, concept or business to a table of donors provides an excellent opportunity to validate and refine your proposal. As potential donors and investors begin to express interest and ask questions, you'll quickly see if you're missing something that would make them more likely to donate.

- Efficiency - One of the best things about online crowdfunding is its ability to centralize and streamline your fundraising efforts. By building one comprehensive profile that you can direct all of your prospects and potential donors or investors to, you eliminate the need to pursue each of them individually. So instead of duplicating efforts by printing documents, compiling linking files, and manually updating each one when there's an update, you can present everything online in a much more accessible format, leaving you more time to manage your campaign or business instead of fundraising.

Check out our how-to article:

Launch a fundraising campaign? How to ask for donations in 7 easy steps.

Do it now at PavelAndreev.ORG.

In our help center you can see What are the conditions for starting a campaign?

What types of crowdfunding are there?

Crowdfunding by its nature is crowdfunding for charitable purposes (which is successfully developed by the PavelAndreev.ORG donation site) and crowdfunding for business purposes.

Which crowdfunding method you choose depends on the type of campaign, the product or service you offer, and your growth goals.

The three main types are:

- Donation-based

- reward-based

- equity-based

Donation-based crowdfunding

Generally speaking, you can think of any crowdfunding campaign where there is no financial return to investors or donors as donation-based crowdfunding. Common donation-based crowdfunding initiatives include fundraising for disaster relief, charities, nonprofits, and medical bills. PavelAndreev.ORG is such a platform

Rewards-based crowdfunding

Rewards-based crowdfunding involves individuals contributing to your business in exchange for a "reward," usually in the form of the product or service your company offers. Although this method offers backers a reward, it is still generally considered a subset of donor-based crowdfunding as it has no financial return or profitability.

Equity-based crowdfunding

Unlike donation- and reward-based methods, equity-based crowdfunding allows participants to become private owners of your company by trading capital for shares. As share owners, your contributors receive a financial return on their investment and ultimately receive a portion of the profits in the form of a dividend.

Ready to launch your crowdfunding campaign now?

As mentioned before, PavelAndreev.ORG is a crowdfunding platform based on charitable donations and fights for good causes. If you have a good cause and want to make it happen together contact me!