Prepared by: Celeste Ng Crowdfunding Prepared by: Celeste Ng Dated: 28th March, 2017 Direct quotes from source: Entrepreneur Media, 2017 “The Basics of Crowdfunding,”https://www.entrepreneur.com/article/228125

What it is: Crowdfunding is about persuading individuals to each give you a small donation -- $10, $50, $100, maybe more. Once you get thousands of donors, you have some serious cash on hand. ... that allow nonprofits, artists, musicians -- and yes, businesses -- to raise money. This is the social media version of fundraising. There are more than 600 crowdfunding platforms around the world...

How it works (1) The most common type of crowdfunding fundraising is using sites like Kickstarter and Indiegogo variety, where donations are Sought in return for special rewards. That could mean free product or even a chance to be involved in designing the product or service. (2) It is also possible to use crowdfunding to assemble (2-1)loans and (2-2)royalty financing. (2-1) Loan: The site LendingClub, for example, allows members to directly invest in and borrow from each other, with the claim that eliminating the banking middleman means "both sides can win" in the transactions. (2-2)Royalty financing: This sites appear to be more rare, but the idea is to link business owners with investors who lend money for a guaranteed percentage of revenues for whatever the business is selling.

Upside Crowdfunding provides another strategy for startups or early stage companies ready To take it to the next level -- such as rolling out a product or service. It is possible to pitch a business plan to the masses群眾. A successful crowdfunding round: Not only provides your business with needed cash, But creates a base of customers who feel as though they have a stake in the business' success.

Downside If you don't have an engaging story to tell, then your crowdfunding bid could be a flop. Sites such as Kickstarter don't collect money until a fundraising goal is reached, so that's still a lot of wasted time that could have been spent doing other things to grow the business. It could be even worse if you meet your goal but then realize you underestimated how much money you needed. A business risks getting sued if it promises customers products or perks in return for donations, and then fails to deliver. There is also an argument to be made that angel investors and even bank officers provide more than just money. They provide entrepreneurs with needed advice. Business owners miss out on such mentorship when they ignore traditional investors and turn to the crowd.

More factors that can better ensure a successful crowdfunding campaign Have at least a small network of enthusiastic friends and family willing to help get the ball rolling by giving and urging others to give. If you're giving out perks in return for money, make sure the perks are cool. Present a serious business plan and an explanation of why the money will take your enterprise to the next level. Demonstrate that you have your own skin in the game because of the personal funds you have already poured into the business. Include a video pitch and keep it short and concise, with a call to action. PBS includes different rewards for different levels of giving; so should you. Be prepared to essentially live online, staying active on social media sites, until the crowdfunding campaign is complete.