Donation based crowd funding model asks for small monetary contributions from strangers, either in exchange for nothing or sometimes offering them small rewards such as an e-card, recognition by naming them in the credits of a movie or song, souvenirs like a t-shirt or a mug, or sometimes the very product that they have funded.
Crowd Funding Donation Differs From Equity Funding Just to make the difference between the two kinds of crowd funding, it is important to know that the donation based model of crowd funding is different from equity based funding in which the companies looking for a pool of investors offer small portions of the equity to the backers of their campaign making them a stakeholder. Crowdfunding donation model in contrast offers nothing to the individuals extending financial help when it’s for charitable purposes. For non-charitable funding, individuals seeking the funds can offer ‘perks’ to make their crowd funding pitch more attractive.
Crowd Funding Approaches Vary From Site to Site Different crowd funding sites offer different approaches to raise money. However, the underlying concept is the same for all. You create a crowd funding campaign for whatever project or personal need you aim to fund and the prospective backers will pool in their money if they find your pitch appealing enough.
The purpose of such sites is to help people in need connect to those who are willing to extend their help. Most of these sites offer a free sign-up and charge a small amount usually 5% on each donation made.
Effective Crowd Funding Requires Constant Effort While crowd funding donation model can prove to be immensely beneficial for those seeking to raise funds, it’s not a magical cure for your financial woes that’s going to happen overnight. The fund raising campaign may take weeks to get some traction from the supporters and for that the person seeking funds must promote his or her cause as much as possible. Once the word is out, other people from around the world may also decide to donate to your cause after seeing the strength of your project.
To know whether a crowd funding site will work for you, individuals can look around a couple of sites and see which kind of projects are getting funded the most. They can then design their campaigns accordingly.
For more information about crowd funder log on to UnderCoverFunder.Com
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