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What is CrowdFunding? What are Donation, Pre order, Reward, Equity models & how does it work?

posted Sep 29, 2012, 4:32 PM by David Khorram
You know Bill, Steve and Warren,  an Entrepreneur, a Start-up and a Small Businessman.  They all have Practical, Money Making and Job Creating ideas,  to create new businesses and help make a better community.  But , They  need money or a loan to fund to build their ideas.
How,  can they  raise the money to create this business and what is the road map? 

The most common method is to get a loan from a bank.  BUT banks  Consider StartUp  Entrepreneurial ventures too risky, especially now, with the Economic downturn and today’s restrictive lending policies . Venture caps and angel investors  also invest in less than %2 of start ups.
Then the answer is usually  a Big  NO for more than %98 of  Entrepreneurs, a Start-up sand Small Businessmen.
Clearly,  this way, there is very little new business development, innovation or growth.  Just think of business and the  World without the Bills, Steves and the Warrens!
Currently, an Entrepreneur needs a Business plan and Loan application.  Then drive to the bank to meet with the  loan officers in  hope of getting a loan.
But not anymore, through the internet , using  cloud and social media environment. the entrepreneur can access hundreds or thousands of potential investors through CrowdFunding websites. Do you know what is crowdfunding ( http://www.youtube.com/watch?v=c25bW9rTEe8 )
There are several ways to seek CrowdFunding:

1st    is Donation method of CrowdFunding .  This model has been around for years. People can donate money, in small increments, to a project which they believe has moral and ethical value that is good for the community.  Examples of this is asking for donations on Facebook causes or Go Fund Me

2nd  is Pre-order method CrowdFunding:  Here people make online pledges during a campaign, to pre-buy the product for later delivery.  A good example of this, is Kickstarter .

3rd is Reward-based method CrowdFunding. This is a variation on the two previous types, where investors get the satisfaction of helping, and immediately gets a pre-determined reward or item of value, but no equity or ownership.  A good example of this, is IndieGoGo  

and finally the 4th is Equity based CrowdFunding:   This is the newest model, which will allow large numbers of “regular” people like you and me, to invest small amounts each online to fund early StartUps, with the expectation to receive dividends or investment appreciation based on profits of the business .

So now we can see that  CrowdFunding is using the crowd to raise capital by connecting people with talent, ideas, and some neat stuff to sell, with those that have the funds to invest their way;  thus creating jobs, new business opportunities and fueling the economy .

CrowdFunding Revenue is projected to 2.8 billion dollars in 2012 , and even more than 16.6 billion in 2014 .  

The speed of growth of CrowdFunding from 2009 to 2014 is very similar to the Growth pattern of the Internet in early 1990s. This raises the big question Question?    

Do you want to just watch CrowdFunding happen and grow?  or you want to be a part of it?   How about  leveraging the  2.5 billion internet users who can be potential  investors with a projected $300 billion dollars of Investment Revenue  opportunity  ?

Do you know the size and potential of of your “Social Capital “ would you like to raise money from thousands or tens of thousand of  your fan ( crowd )  ?

Discover how to Capitalize on “Your Network” and learn to start your successful CrowdFunding Campaign !   To learn  you can Visit CrowdFundingplanning.com  Now!

Crowd Funding Planning.com is a Business Advisory, Education and Mentoring entity for the New Venture to use CrowdfFunding Methods to get “SeedFunding & StartUp
Resources” for your innovative Product or Service.  

This establishes Brand Identity, while securing a Crowd of initial  core-supporters and
customers, using the Cloud and Social media marketing.  This low cost business
support system positions you to seek Secondary Funding in the Angel, Private
Equity or Venture Capital environments, with a validated Business Concept and Marketplace.  

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