Crowdfunding has become increasingly popular, especially on the Internet. This is due to one important fact: the internet allows a single person can reach thousands of others with a simple click. This is the fundamental key to Crowdfunding success. It’s simple; the more people know about your cause, the more potential backers and therefore possible chances of success you have.
The number of Crowdfunding platforms has been growing exponentially in the last two years, and since there are different types of campaigns, there are also different types of Crowdfunding. There are many varieties, but here are the main three:
- Equity-based Crowdfunding: those who make a investments are offered a share of the company, stake or a share of its profits.
- Reward-based Crowdfunding: people who financially support the project expect to receive a product or service as a reward for their contribution.
- Donation-based Crowdfunding: contributions are selflessly given by the donors who fund the cause and expect no compensation in return.
Rewards and Donation based Crowdfunding are the two most popular and most used by users. Within these two types there are two Crowdfunding models called:
- KEEP IT ALL: each transaction is entered directly into your account immediately.
- ALL OR NOTHING: if the economic objective is achieved (usually within a period of time), all contributions are transferred directly to your account. If the goal is not met, backers won’t be charged, and your cause will receive nothing.
Some platforms, like GetYourCause, go a step further, separating the causes or projects into three types according to their nature:
PERSONAL: Intended for personal financing, any cause or reason that really matters to you.
CREATIVE: Designed to fund new companies, businesses or entrepreneurs with an innovative idea.
SOCIAL: Similar characteristics to ‘Personal,’ with the main difference being a focus on charitable causes or social work.
To maximize success, categorize your crowdfunding campaign along these guidelines and then seek out communities that are more likely to support that specific type of project. The most important thing is
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