As one of the biggest financial changes in history, crowd funding is revolutionizing the way money is exchanged globally. It is a breakthrough in the way we collect capital for our business online. Although a relatively new investment practice, many businesses, individuals and start ups are increasingly using this method to raise funds for their ventures.
According to the Massolution crowd funding report of 2015, the global crowd funding industry grew 167 per cent from $6.1 billion in 2013 to $16.2 billion in 2014. The industry has more than doubled to reach $35 billion in 2015.
Since 2012, a new wave of crowd funding has taken over in India. The country is leading the pack in Asia after China when it comes to crowd funding. The entire process is moving online in India. In India, crowd funding takes place when a company seeks funds from non-resident Indians and foreign investors from across the globe. There are 3 main types of crowd funding in India:
- Rewards-based crowd funding: A fund collector raises funds for his or her project from venture capitalists in exchange of rewards instead of monetary profits.
- Equity based crowd funding: An individual collector raises funds from many investors for a stake in business
- Donation based crowd funding: A kind of raising funds where one donates a lump sum for nothing in return in a business.
Since crowd funding is a fast developing industry, the outreach of the digital media and the Internet is fuelling an exponential growth in it. Internet usage in India stands at about 35 per cent in 2016. Needless to add, the need to be build crowd funding platforms is huge. We at Digital Aptech are making this process easier and faster. With the funds gathering made quicker and efficient, it is now imperative that we understand a few facts.
- 1. Before launching a crowd funding campaign read the fine print about the platform or site you want to use. We at Digital Aptech believe that before you launch a campaign or make your account, you should know the ins and outs of the certain choice of platform. There are a myriad of options, you should know which one is suited for your business.
- 2. You also need a website idea that translates your marketing plan to get your campaign off the ground. You may have a great idea but translating that into a real time success story is a challenging exercise we have mastered at Digital Aptech. You need to develop a strong and well executed plan to raise capital through the platform built. Creating impactful websites and marketing these in the initial days when the business takes off is our niche.
- 3. Calculate how many people you want to approach through your platform. To achieve your goal, you need to devise a marketing plan. Building your network is next important in the to-do list.
- 4. Identifying the early champions, those who can rally their network to help you reach your goal, is the next most important thing to do. You need to approach the media and create content that will help in the promotion of your business.
- 5. Although communicating with potential investors is easier than ever before, you need an organized campaign to make it work. Most campaigns fail when they don’t have fully baked business plans before a launch. Create a business plan and circulate it among your contacts to sell your story through crowd funding.
While crowd funding may never fully replace traditional funding options, this method of raising capital is gaining traction with every passing year. In India, like globally, crowd funding is here to stay. By 2025, according to the World Bank, the global crowd funding market will be between $90 billion and $96 billion. Traditional financing will be hard to get and for the crowd funding platform developers, it is a great business opportunity and we at Digital Aptech are keeping our fingers crossed!
November 15 , 2016
This entry was posted in Crowdfunding
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