Crowdfunding has been an effective fund-raising tool for millions.
Whether a couple is trying to raise funds for their honeymoon vacation or to try and support a new product, start a business, or fund a charity, for many this method of fund-raising can be a very efficient tool.
These days you are able to crowdfund just about anything. There are sites helping people to crowdfund everything from weddings and funerals to charities and a great multitude of business endeavors, medical treatments, anniversaries, divorces, and more.
And there are a variety of platforms that you might be familiar with today that are popular for crowdfunding, like Kickstarter, Indiegogo, Plumfund, Crowdfunder, and others.
You can now even crowdfund the down payment for your home thanks to a recent site that was just launched by CMG Financial that's called HomeFundMe.
The site, HomeFundMe, is regarded as the first platform online that is enabling borrowers to use the crowdfunding method to raise funds for their down payment toward the purchase of their home.
Previously, lenders allegedly prevented borrowers from obtaining down payment assistance from this method, and they were only able to get help from places like close family members, their employer, a non-profit, or their local church etc.
Those who use the site are able to receive the funds as tax-free cash gifts and if successful, this program might be extended to other lenders in the market.
Global crowdfunding investments are expected to surpass $93 billion by 2025.
There are many reasons why people choose to opt for crowdfunding as a way to try and raise money for their diverse aspirations:
- It's a cost effective option that can cost practically nothing yet potentially reap a great deal in-return
- it's a great way to test an idea that hasn't been tested yet
- it offers market feedback, you can hear what people think about the product before officially even launching it on the market or producing a massive amount of the item etc.
- for some it's their last or only option to try and raise the funds for their home, honeymoon, funeral, business etc.
- it offers professionals a chance to build a following before they've even launched a product and they can build a demand for the product
These are just some of the reasons why someone might want to opt for crowdfunding as way to try to raise the funds that they need.
But not everyone who turns to crowdfunding has a success story, there are obviously many who weren't able to meet their objectives.
And even for those who do secure funds, it might not all be a success story afterward. They could still have problems later on with things like being late on deliveries or suffering development problems, and more.
It's not an easy process and some never seen anything in-return for their efforts. But it's exciting to see how big this space has grown over the years and to see now that global crowdfunding investments are expected to reach $100 billion within just a few years. And to see how diverse the financial endeavors have become that people are interested in using crowdfunding to try and solve.
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thinkstock via www.thestreet.com/story/13937268/1/here-are-4-somewhat-risky-stocks-that-may-deliver-explosive-gains.html
Sources:
https://www.entrepreneur.com/article/300816
https://www.forbes.com/sites/alisoncoleman/2016/09/14/crowdfunding-why-startups-are-ignoring-the-risks-and-betting-the-farm/#ef614074a507
https://www.bizjournals.com/cincinnati/news/2017/10/09/not-your-fathers-crowfunding-cincinnati-startup.html
https://www.cnbc.com/2017/10/05/a-new-way-to-buy-a-home-crowdfunding-the-down-payment.html
http://www.marketwatch.com/story/this-lender-will-now-help-mortgage-borrowers-crowdfund-their-down-payment-2017-10-05