Crowdfunding is used by start-up companies to raise the funds they need to get their business off the ground. In the past companies would have to look to venture capitalists and banks for funding, but not anymore. Now, they can turn to you.
There are three different types of crowdfunding: donation-based, where people give money out of goodwill; equity crowdfunding, where investors get a share in the company and reward crowdfunding, where donators contributions are exchanged for current or future products – the most popular type at this time.
Investing your money in reward crowdfunding can be done through sites such as Kickstarter or Indiegogo. You invest a small amount of your money, and you receive exclusive products in return. A rewards-based campaign offers the same thrill of backing a fledging start-up but without the risk.
There have been huge success stories to come out of rewards-based campaigns, including the dementia Eatwell set which raised over $100,000 meaning Sha Yao could get her life changing product to those who need it most.
In June 2016, Proximity will be reward crowdfunding through the platform Indiegogo.