Crowdfunding is a widespread form of investment worldwide because of the many advantages it offers. Indeed, this type of investment allows both companies and individuals to easily and quickly find financing to carry out their projects. Despite this, it is very little known. Find out more here about this type of financial investment that is truly profitable for all parties involved.
What is crowdfunding?
Crowdfunding is an expression in English that means “financing by the masses”. It consists of raising funds for a specific project via an internet platform. In the past, it was used to finance large cultural, religious or political projects. But today it can be used to finance all kinds of projects. For example, for the creation of a company, a technology system or simply for the realization of personal projects. Indeed, this financial investment supports the practice of traditional investment.It thus has several advantages.
You can invest in just a few clicks and benefit from significant rewards or rewards depending on the type of investment you choose. In short, this type of investment is a perfect alternative to microcredit and bank loans. This investment system also allows entrepreneurs to test their ability to lead a project.
Which platform to choose?
Several platforms today claim to be crowdfunding. So you have to be careful when choosing the platform. Therefore, it is important to choose your investment platform carefully.
What are the different types of investments and their advantages?
There are several ways to invest in crowdfunding.
Ø Donation and reward funding : this type of investment is the best known. It consists of a natural or legal person making a donation to projects without expecting anything in return. Most often, these are cultural or large-scale projects. Reward funding follows the same logic except that it results in a gift to those who participated in the funding of the project in question. This could be a dedication, goodies or a boat ride, for example.
Ø Loan financing (subscription): Here, it is a question of individuals or companies applying for a loan in order to carry out their projects. This loan can be repaid with or without interest if the lender decides to do so, but within a predefined period of time. This allows donors to immobilize their resources or to be able to make a profit that will depend on the amount invested. On the magazine-assurance.fr website, you will be able to obtain sufficient information on this method of financing.
Ø Financing with investment in company capital (equity): this financing consists of helping a company to build up its capital and thus become a shareholder. The advantage for donors is that they can benefit from another source of income. They can also benefit from tax deductions on the payment of income and wealth tax in France.
Recently, crowdfunding has been experiencing a meteoric rise in Europe. There are platforms that do not seek to specialise. These platforms therefore offer investments in almost all areas.