Crowdfunding platforms are of various types, and if you are looking for guidance, as to which platform or typo to choose, then read on. As the concept of crowdfunding comes with investments risks, and also attractive rewards, thus you get constant opportunities to get rewarded, or make money. But an investment will be rewarding only when you choose the right place for funding.
Reward based crowdfunding platforms
The reward based crowdfunding platforms are meeting places for business founders and investors, where the investor gets a reward from the business once the business starts rolling. This reward can be in the form of a product discount or cashback, or in the form of a custom made product, or some other offer etc.
The downside of such platform is that, many of the businesses often disappear without a clue when they have raised enough money. As the amount of investment is really low on such platforms, the lenders often feel cheated and helpless, and yet forget this soon, and also lose hope with this way of investing. In short it’s risky and a dicey game.
Equity based crowdfunding
This is one of the most popular investment method opted worldwide for lesser risks. Normally a company will not make a fake entity to raise funds, as there are authoritative and verifying bodies everywhere for checking scams. That way the investor can be sure of investing in legitimate concerns. But often there is no surety of making money. It’s a gamble. One may get good returns with planned investments, else the money may go to drain.
Debt based crowdfunding
When the investor looks for minimizing the risk of investment, then debt based crowdfunding is a good way to invest. Here a pool of money is made through taking investment from several lenders. And then the authority of the crowdfund company decides where to invest the money in parts for fetching good returns. The return fetched is then divided as per investment percent to the investors while the company keeps its own shares of fees.
The newly rising crowdfunding trend lies with cryptocurrency based funding through blockchain technology. The technology is new, and many investors are experimental with this. But the high risk and very high return games this crowdfunding option offers can bring one from rags to riches too quickly. Ofcourse the opposite can also happen, and there lies the risk in investing on crowdfunds. However the high level of encryption in blockchain based transactions, and the quickly proliferating values of cryptocurrencies makes this an inviting way to invest for the new gen. keeping in mind the volatility of cryptocurrencies, this can be made the new way of investment.