Answers On Crowdfunding For Equity
Crowdfunding has virtually crept its way into nearly all aspects of our modern society. Whether it’s a music mogul or movie star looking for support from his or her fans, or a political campaign, from scientific research even into motion picture promotion and disaster relief, there are many ways ones have been able to build funds for their projects. But what about equity? As you read through this article you will find some interesting information in regards to crowd funding for equity.
To begin what is the big idea of crowd funding in the first place? What how does this separate itself from any other mainstream ways of achieving money or property or ownership? Crowd funding breaks down into 2 principles.
First, when a group of people collect together, pooling their interests, resources, capital, and money and network it (usually through the internet) to serve a specific cause or help an organization. As was stated earlier, crowdfunding is used in a large array of activities. Software development, civic projects, and even motion picture promotion have been popular ways in which ones have crowdfunded.
The second principle applies to funding a specific company or organization by using small amounts of equity and selling them to many investors. Thus we have: crowdfunding for equity. How would one go about doing this, and what are some points to be concerned about?
Equity has been defined as the security or stock that represents ownership or even interest. So you can see why this would be popular among investors and ones considering crowdfunding. But crowdfunding for equity is more than just buying and selling or stock and interests owned by individuals. It breaks down into an even more interesting assignment.
Crowdfunding for equity was originated using the same basic idea of crowdsourcing. You have an individual who wants to reach a goal, so he receives and leverages small contributions from a crowd of persons, many parties involved. It is the best case scenario for quantity over quality. The more contributors you have the more you can gain.
Crowdfunding takes this aspect of crowdsourcing and mixes its goal a bit by making the individual into a project or venture. Now the contributors are interested in financing, or investing to kick start a specific idea, or project.
There are many models of crowdfunding for equity. Each one includes a variety of participants. On the one hand you have those who propose the ideas or projects to be funded (these are the masterminds behind the scenes). Then you have the crowd or the group of people who support such an idea or project (these are the backbone to the entire structure). However one key element is needed.
The platform is basically the organization that brings together the starter, or the one who built the idea, along with the crowd, the group of people funding the idea. The platform is like the glue that holds the two entities together. Whether you’re just considering crowdfunding for equity or just looking at information, you can be sure with an initiator and a crowd along with a platform, you can do well.