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Crowdfunding

Crowdfunding in Today’s World

Crowdfunding is the use of small amounts of capital from a large number of individuals to Finance a new business venture or raise funds for a needy cause. The concept of crowdfunding has roots that go back centuries, but the modern form as we know it today began to take shape with the advent of the internet and E-Commerce. Platforms like Kickstarter and Indiegogo, launched in the late 2000s, have made it significantly easier for creators to find funders for everything from new tech gadgets to indie films to entrepreneur businesses to nonprofit organizations. Crowdfunding now encompasses all generations from Baby Boomers to Millennials to Generation X and Generation Z.

Crowdfunding comes in different forms. Donation based crowdfunding is where people give Money to a project or cause without expecting anything in return. It’s often used for charitable causes and non-profit organizations. Equity based crowdfunding is where investors receive a stake in the company, typically shares of stock, in exchange for the money pledged. This type is more regulated than others, with legal stipulations in place to protect investors. In debt based crowdfunding, also known as peer-to-peer (P2P) lending, in this model, investors lend money to the campaign initiator in exchange for interest-based returns. It’s akin to taking out a loan, but the lenders are individual investors. And in rewards based crowdfunding, backers contribute to a project in exchange for a “reward,” typically a product or service the project aims to produce.

Our experts in this area of the site talk about needing the proper knowledge and strategic planning as you begin to crowdfund. Baby Boomers and other generations can leverage crowdfunding platforms to turn their dreams into reality. Whether it’s launching a new product, starting a community project, or even funding a Retirement dream, there’s a place for everyone in the crowdfunding space.

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