Franchises

Ways Franchise Brands can Identify The Right Crowdfunding Platform

Online collaboration is an area of exponential growth. Here's how
Ways Franchise Brands can Identify The Right Crowdfunding Platform
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2 min read

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To begin with, let’s familiarize with the meaning of crowdfunding. Crowdfunding is a means of raising finance by asking individuals to commit whatever amount of money they wish to invest in a new product or startup company through the web.

This method of collaboration is becoming ever more popular, resulting in a rapidly growing market which is effectively transforming how individuals invest and spend their money, and the ways in which businesses can raise capital. According to Technavio’s report on global crowdfunding market, it is expected to grow at a CAGR of around 17% between 2017 and 2021.

There are various crowdfunding sites to choose from, such as Crowdcube, Crowdfunder, Kickstarter and Indiegogo and many more. However, similar to most business cases, timing is key as you’re far more likely to be successful crowdfunding for something new, creative, unique and innovative than for a product or service that has been around forever and which everyone already has. 

Selecting the right crowdfunding platform for your brand

There are many platforms to choose from. So, do proper research and check them all out before deciding. Next, know that there are many crowdfunding methods to decide from depending on the product or service you plan to offer. There are three different kinds of crowdfunding for businesses:

Rewards-Based Crowdfunding is where you offer a reward in the form of product or services to your investors for their investment. This is one of the most common forms of crowdfunding as it allows businesses to incentivize contributions without incurring much extra expense or selling ownership stakes.

Equity-Based Crowdfunding is where contributors become part-owners of the business by trading capital for equity shares. This means contributors receive a financial return on their investment and ultimately a share of the profits.

Peer-to-Peer Lending, is like loaning money to a friend and an alternative to the traditional method of looking for funds.

This article was originally published in Franchise India by Smita Nag.

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