When stumbling upon an innovative idea or a project ready for implementation, visionaries and entrepreneurs tend to research possibilities for investing. But now you do not need to be a millionaire with a lot of experience in order to financially back a product and expect a lucrative return – crowdfunding platforms enable everyone to support projects they find interesting with, usually, a low- barrier entry!
There are many ways of privately investing in startups or other futuristic ideas that do not require venture capital – but we believe that crowdfunding platforms offer Internet users the best crowdfunding investment experience.
The emergence of crowdfunding platforms has proven to be incredibly beneficial to the wider public, as it solves the problems that were common in traditional ways of collecting funds. In recent decades crowdfunding has become a widely popular way of getting money for projects such as new games, films or music videos, community-oriented businesses, mobile apps, and many more! Crowdfunding investments engage a larger audience and may give the supporters of the projects a say in the process of creating the product.
One of the biggest trends, lately, is investing in startup companies (new projects that do not have the big capital yet). There are a lot of factors that make this kind of activity seem alluring to entrepreneurs – for instance, equity crowdfunding allows investors to have previously agreed upon rights (for example, voting rights). Moreover, due to the fact that this is usually some kind of seed investment, the minimum collection amount might be rather small – but if you conduct a thorough research and believe a project looks promising, then this kind of backing might be lucrative for you when you get a return on your investment. By investing in new companies, you help create new businesses and support new ideas that can influence the world. By becoming a startup investor, you’re creating the new economy. Moreover, thanks to the possibilities of backing startups with little money, you can diversify your investments, thus decreasing the possibility of a loss.
Investing in crowdfunding is a good way of creating new communities, for example it gives you opportunity to find other people interested in similar, non-mainstream fields. Together, there is a bigger chance of implementing a project due to the fact that some obscure ideas might be overlooked by big funding organisations. As the market is restructuring, the money from your investment will go straight to the source of your choosing on a crowdfunding website, and not to the pockets of the “Wall Street” representatives (apart from a small fee- make sure to check what percent of the money from collection goes to the platform).
Although there are potential risks, such as questionable criteria of assessing project’s value and potential, there are websites that actually require the project to pass the evaluation process before allowing crowdfunding to begin.
If you want to know how to find out whether a project has the potential of being profitable for you in the future – you need to research the project, estimate the team’s human capital as well as the idea’s commercialization potential. These two factors are believed to be the best indicators of whether the project will be successful. Moreover, start-ups and other projects with balanced “risk/reward” profiles are usually more trustworthy. Of course, due diligence is necessary, as investing is always associated with risk, but it is a part of the game.