What is Crowdfunding❓ SME funding source

What is Crowdfunding❓ SME funding source

👉🏻What is Crowdfunding?

Crowdfunding is raising funds from a large number of people. for a specific project or business The project owner has to bring out their own ideas or businesses to raise funds from investors to get the amount they want. There will be a return or not, depending on the form and purpose of the investment. Crowdfunding is divided into 4 investment styles, investment styles.

1. Donation-based Crowdfunding

It is a form of fundraising in the form of 'donations'. The main objective of the project asking for fundraising is usually social or charitable projects, so investors will not receive any returns. Because it invests money to support and help itself, such as the Toon Bodyslam's Kao Kon Kao project to bring the money raised from the fundraising to go to the hospital.

2. Reward-based Crowdfunding

fundraising in exchange for “Goods or souvenirs” as a reward It is similar to paying to pre-order products that are not yet manufactured. Only prototypes and ideas

those interested in that product It will invest money to raise funds for the owner of the idea to actually produce the product to the market. As for investors, they will receive that product as a return, which at present is not just a product. There are also fundraising events for short films, games, music, and even comic books.

Check out some creative fundraising ideas here. www.kickstarter.com which has good projects There are many that you can join in fundraising.

3. Peer-to-Peer Lending

Fundraising is a “borrowing” between a lender (investor) and a borrower (individual or entrepreneur), with the platform acting as an intermediary to collect funds from investors in the amount required by the borrower. in which the borrower must repay the loan with interest to the investor in accordance with the agreement

All these steps will not involve any financial institution. The advantage is Borrowers have easier and faster access to funding. While investors get returns in the form of "interest" that is higher than the deposit interest rate. But it must be exchanged for the risk that the borrower will default on the debt.

4. Investment-based crowdfunding

There are two types of fundraising in the form of “securities”:

- Business fundraising by issuing "shares" (Equity based) to investors. When there are shares, you have the right to own the company in proportion to the amount invested. and have the right to receive dividends or can sell the shares But it still depends on the company's policy.

- The business raises funds by giving "debt based" to investors, which investors will be as "creditors" of the business, so they receive returns in the form of "interest" and receive a repayment of the principal at maturity.

👉🏻Who is Crowdfunding suitable for?

When it comes to fundraising and investment, crowdfunding involves two groups of people who will have a stake in this fundraising event.

- Crowdfunding applicants

It can be seen that fundraising in this manner There is a very wide range of fundraisers. It can be a non-profit organization, a foundation, a business owner. start-up business To the general public, Crowdfunding is appropriate according to the type and form of investment as well. which may be broken down as follows:

- Want to raise funds in the form of a project to help society

It is clearly a fundraising that is in the form of Donation Based Crowdfunding and Reward Based Crowdfunding. and non-profit organizations who want to raise funds in the form of a project or in a clear number for one purpose It might be a lunch for kids. patient assistance program Help an injured dog or cat, etc.

But nowadays we find that donation based crowdfunding is not always charitable. It may be just a group of people who want to contribute to change or help society. This type of crowdfunding may or may not limit donations.

The Reward Based Crowdfunding section is suitable for large corporations with funding to create souvenirs. Crowdfunding like this, the fundraiser must be careful about the cost of producing the prize. Especially selling to raise funds such as shirts, hats, etc., because the opportunity will not be sold out, it becomes a high cost to be wasted in vain.

- Want to raise funds for a business

This type of fundraising can be done both by Debt Based Crowdfunding and Equity Based Crowdfunding because it is a request to raise funds in order to have money to continue doing business. suitable for business owners The difference is that Debt Based Crowdfunding at the end of the contract. The Applicant and the Funder are not legally related, but for Equity Based Crowdfunding, the Applicant and the Funder will continue to form a partnership. until such shares are sold to other persons or business owners who bring their shares to raise funds agree to buy back

- Crowdfunding funders

Crowdfunding is a fundraising that is open to funders. This can fund all forms of crowdfunding, including donation-based giveaways. Buying souvenirs or rewards, including investments that receive returns in both money and stocks, which can be divided into 2 large groups:

- Non-return funders

It is a type of donation that the funder may wish to contribute to the successful completion of the objective of the fundraising project. or want to see changes occur in society This form of fundraisers often demand a sentimental return. Some campaigns that ask for donations are very successful. But at the same time it's crowdfunding that plays with feelings. It is therefore often found that this kind of funding turns out to be a scam. The funders must verify their credibility before making investment decisions. or to donate through a trusted platform It can help reduce the risk of being deceived. Funding like this is often Donation Based Crowdfunding and Reward Based Crowdfunding. But donors often don't feel disadvantaged. because plus the sentimental value received as well

- Funders who want returns

They are often investors who seek new investments and are willing to take risks. Because investing in Crowdfunding, in other words, is an investment in a business. through an intermediary or platform Investors who want to invest in a profitable manner should choose to invest in Debt Based Crowdfunding with a return on debt with interest, and Equity Based Crowdfunding with a return on equity in the investment business. which investors interested in investing in this form Must be qualified as required by law as well.

👉🏻Crowdfunding how is it useful

Crowdfunding is a form of requesting and providing funding from sources other than banks or financial institutions. This is another form of Financial Inclusion that will provide funders, including foundations, small-business owners, more opportunities to access funding. and have the opportunity to receive small lump sums of capital from multiple funders that eventually combine to form a large lump sum.

the funder itself In terms of investment, the Crowdfunding model is a good investment diversification. because instead of investing large sums of money into a particular business has diversified its investments in many businesses, resulting in if one of the applicants cannot pay the debt as scheduled There are still others that can pay and provide consistent returns.

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