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crowdfunding basics

Crowdfunding Basics

Crowdfunding Basics – This Really Isn’t Rocket Science

As we delve into crowdfunding basics we need to take a look back in history. Think back a decade or so ago. If you wanted to raise money for something, be it a new business venture or an invention, what did you do? In all likelihood, you had to go to the bank to obtain a large loan, and pay interest on it. Or you would have to find possible investors — people with access to a lot of funds, for example, who would then own a portion of whatever it is you’ve created or started. Or you’d self-fund your venture out of your savings account or on credit cards.  Seriously.  People did that.  Some still do.

But in recent years,  a new way of funding ideas and creations has taken root and is flourishing.  You could almost call it democratic capitalism.  It’s a funding mechanism that involves a lot more personal interaction where people vote with their dollars on the companies, products, services or causes they believe in: crowdfunding.

Crowdfunding is just what its name implies: A number of people all contribute to a funding opportunity, giving in amounts that can range from very small to very large. Those people often receive something in turn, such as a product that the crowdfunding opportunity is going to try to create. Or partial ownership in a company in the form of stock.

Crowdfunding basics are really all you need to know to get started.  I’m frequently asked crowdfunding questions on Quora and I can’t help but wonder why some people think crowdfunding is so complicated when it really isn’t. Crowdfunding in a nutshell simply is selling somebody on your idea or vision.

Want to learn more? This graphic gives you all of the crowdfunding basics.

 What is Crowdfunding and How Does it Work?