What is Crowdfunding ?
The Crowdfunding is another way for companies, individuals raise funds for their projects. In most cases it is the combination of a large number of people investing a small amount that enable project developers to find the funds requested. This method of financing is also a way to unite as many people around his project.
It allows the linking of specific project leaders and donors or contributors.
Models of Crowdfunding:
Thus, the crowdfunding applies 3 different models:
The first model is the system by donation also applying as a purchase in advance or pre-order. This
system also allows crowdfunding to collect contributions before the launch of a product that can give rise to various counterparties. This is the simplest form of crowdfunding. It relies on the generosity of funders and their willingness to contribute to the realization of a project. Collecting donations can be initiated by an existing community.
The second model is that of investment or capital stake. Here crowdfunding allows subscription of securities (stocks or bonds) where the investor acquires equity securities or debt securities issued by the company. The company, startup or SME, therefore enjoys a real support with a Business Angel.
And finally the lending model (peer-to-peer lending) which is designed for ESS structures wishing to create or develop. These structures are partnering with banks granting the loans ultimately through financial support. This is a loan with an interest rate.