The A to Z of Crowdfunding

By Jerome Matticks

No money, no fun? Not any more! Nowadays, start-ups, one man businesses, social organisations and even the ordinary man next door can tap into various crowdfunding platforms to made their wildest and wackiest ideas come true. The crowdfunding concept is simple: you describe your idea, and the group decides whether or not it’s good and has potential by the financial support they do or don’t offer.
Crowdfunding enables people and companies with little capital to get to work immediately. But it’s far more than just making an investment or providing funding: the interested parties are right in the middle of the action, watching the birth of a new and exciting idea first-hand!
This guide aims to provide an overview of the crowdfunding scene. We look at questions such as how crowdfunding evolved, the role it plays in society today, and how crowdfunding works for different groups of people. This book also aims to help you find the right platform for your very own idea! This book is your perfect companion when it comes to finding the ideal strategy and getting your idea up and running. Crowdfunding is not simply about creating a convincing video, but also about doing a certain amount of homework and networking, which you’ll need in order to market your product successfully.
Last but not least, this book describes some of the biggest successes and flops in crowdfunding. Immerse yourself in the world of crowdfunding, and read how you can deploy simple means to move the masses and bring your idea to life!

• Language: English
• Publisher: Jerome Matticks
• Release date: Apr 7, 2018
• ISBN: 9781547520497

Book preview

Crowdfunding: An overview

What is crowdfunding?

Crowdfunding is still a relatively new concept, which took off with the widespread use of the Internet. Crowdfunding can finance projects, products, start-ups and much more. The possibilities range from fountains in Africa to new albums by unknown musicians to research for investigative journalism. What makes crowdfunding so special is that a large number of people (the crowd) financially support a project and thus help to make it possible. The idea behind crowdfunding is very simple: many people (crowd) come together to finance (fund) an idea or a project. In many cases, young people with ideas but not enough money to realise them can use the Internet to obtain the required funds. After all, it takes time to implement a good idea. Without enough reserves, and if the bank considers the risk too high, you need donors. When things go well, crowdfunding is not just a way to turn an idea into reality. It is also a means to stimulate widespread interest and attract the attention of the target audience. In addition to the financial aspect, crowdfunding usually involves supporters emotionally in the project.

Crowdfunding projects have generally been organised over the Internet. The investors therefore consist of a large number of Internet users. In most cases, a minimum amount is set in advance that has to be reached in a predetermined period of time in order for the project to be realised. In proportion to the minimum capital amount, each member of the crowd (crowdfunder) makes only a small financial contribution. The crowdfunders, or financiers, can also select either an individual amount or a pre-set total. As a rule, the borrower uses this platform to publish an open call for tenders, aimed at all legally competent Internet users, without including or excluding any possible donors.

Another characteristic of crowdfunding is that any funds raised through crowdfunding must be used for the particular cause of the campaign. However, there is currently no specific legal basis for the process of crowdfunding in countries like Germany, for example. In the USA, on the other hand, the signing of the JOBS Act by President Obama created such a legal basis. What’s more, when it comes to crowdfunding, the all or nothing principle applies. This means if the online community fails to raise the estimated amount, no money at all will flow into the