What Are CrowdFunding Donation, Pre Order, Reward, Equity Models & How Does It Work ?

posted Oct 4, 2012, 8:12 PM by David Khorram   [ updated Oct 7, 2012, 10:20 AM by David Khorram ]
By: www.CrowdFundingplanning.com David Khorram

You know Bill, Steve and Warren, an Entrepreneur, a Start-up and a Small Businessman. 
Santa Ana, CA -- (SBWIRE) -- 10/02/2012 -- You know Bill, Steve and Warren, an Entrepreneur, a Start-up and a Small Businessman. They all have Practical, Money Making and Job Creating ideas, to create new businesses and help make a better community. But , They need money or a loan to fund to build their ideas. How, can they raise the money to create this business and what is the road map?

The most common method is to get a loan from a bank. BUT banks Consider StartUp Entrepreneurial ventures too risky, especially now, with the Economic downturn and today’s restrictive lending policies . Venture caps and angel investors also invest in less than %2 of start ups.

Then the answer is usually a Big NO for more than %98 of Entrepreneurs, a Start-up sand Small Businessmen.

Clearly, this way, there is very little new business development, innovation or growth. Just think of business and the World without the Bills, Steves and the Warrens!

Currently, an Entrepreneur needs a Business plan and Loan application. Then drive to the bank to meet with the loan officers in hope of getting a loan.

But not anymore, through the internet , using CrowdFunding portals, cloud and social media environment. the entrepreneur can access hundreds or thousands of potential investors through CrowdFunding websites,crowdFunding consultants and CrowdFunding seminars and conferences. Do you know what is crowdfunding ( http://www.youtube.com/watch?v=c25bW9rTEe8 )

There are several ways to seek CrowdFunding:

1st is Donation method of CrowdFunding. This model has been around for years. People can donate money, in small increments, to a project which they believe has moral and ethical value that is good for the community. Examples of this is asking for donations on Facebook causes or Go Fund Me

2nd is Pre-order method CrowdFunding: 

Here people make online pledges during a campaign, to pre-buy the product for later delivery. A good example of this, is Kickstarter .

3rd is Reward-based method CrowdFunding. This is a variation on the two previous types, where investors get the satisfaction of helping, and immediately gets a pre-determined reward or item of value, but no equity or ownership. A good example of this, is IndieGoGo 

and finally the 4th is Equity based CrowdFunding: 

This is the newest model, which will allow large numbers of “regular” people like you and me, to invest small amounts each online to fund early StartUps, with the expectation to receive dividends or investment appreciation based on profits of the business .

So now we can see that CrowdFunding is using the crowd to raise capital by connecting people with talent, ideas, and some neat stuff to sell, with those that have the funds to invest their way; thus creating jobs, new business opportunities and fueling the economy .

CrowdFunding Revenue is projected to 2.8 billion dollars in 2012 , and even more than 16.6 billion in 2014 . 

The speed of growth of CrowdFunding from 2009 to 2014 is very similar to the Growth pattern of the Internet in early 1990s. This raises the big question Question? 

Do you want to just watch CrowdFunding happen and grow? or you want to be a part of it? How about leveraging the 2.5 billion internet users who can be potential investors with a projected $300 billion dollars of Investment Revenue opportunity ?

Do you know the size and potential of of your “Social Capital “ would you like to raise money from thousands or tens of thousand of your fan ( crowd ) ?

Discover how to Capitalize on “Your Network” and learn to start your successful CrowdFunding Campaign ! To learn you can Visit CrowdFundingplanning.com Now!

Crowd Funding Planning.com is a Business Advisory, Education and CrowdFunding Mentoring entity for the New Venture to use CrowdfFunding Methods to get “SeedFunding & StartUp Resources” for your innovative Product or Service. 

This establishes Brand Identity, while securing a Crowd of initial core-supporters and customers, using the Cloud and Social media marketing. This low cost business support system positions you to seek Secondary Funding in the Angel, Private Equity or Venture Capital environments, with a validated Business Concept and Marketplace.