How crowdfunding platforms are helping startups and social campaigns reach their potential
Sandeep Desai is a former marine engineer, academician, and Founder of Shloka Missionaries. He gained fame because he had to resort to begging in Mumbai’s local trains to raise funds to start English medium schools for underprivileged children across villages in Maharashtra, Rajasthan, and Bihar.
But with the power of crowdfunding, he was able to raise 90 percent of the required funds in the first few weeks itself, and could concentrate his energies on the actual execution of the project.
Then, we have Neelima Mishra from Odisha, who was the only Indian to be selected for the 'Leadership on the Edge Programme', a part of the Climate Force Arctic Expedition led by Sir Robert Swan. But due to shortage of funds, the climate change activist and a super campaigner against single-use plastics, couldn’t afford to turn this dream into a reality.
But, crowdfunding opened up the path for her. She raised 114 percent of the goal amount in two short months. Today, she is an influencer who motivates the youth for a number of environmental causes.
Both Sandeep and Neelima’s campaigns raised funds for their causes on a fundraising platform.
Rise of crowdfunding
These were just a couple of examples of how crowdfunding is making a difference in the fabric of society. Crowdfunding, as the name suggests, is all about engaging the crowd or the masses to co-fund social projects and startup ventures.
Increasingly, crowdfunding has become an online activity, usually promoted through reliable platforms, where several people invest, lend, or contribute small amounts of money for one’s business or social idea.
In India, crowdfunding is steadily taking a strong concrete shape, becoming the fastest, easiest, and the most popular way of procuring funds. These platforms work through individuals or organisations that invest or donate to crowdfunding projects, with an intention of charity or in return for a potential profit or reward.
Donors that back campaigns usually receive an acknowledgement, a small reward or some other form of financial gain (perks) in return.
A little sum for a long way
Crowdfunding allows a large number of people to invest in affordable amounts, which together can amount to huge sums. It helps raise financial support for people, businesses, ventures, and charities, especially for those who have no other funding source to turn to or when other funding sources are too expensive to be borne by the fledgeling business or social ideas.
Funding through crowds helps raise money with little or no initial costs, which is another benefit of this resource. Not everyone can successfully get bank loans or access other ways of borrowings. Crowdfunding, therefore, plays an important role as the best possible way to fund a venture without having to gather debts. Here, funds can be procured by the promise of profit sharing or rewards.
All fund-raising activities require proper planning and a host of related promotional activities. Crowdfunding platforms may additionally aid campaigns through content creation, content marketing, audience and donor outreach, social media marketing, and other related activities.
It helps to set up a project or business and bring it in the media’s attention through the online platform. Through online presence, many people and experts can see an idea and guide or invest in it, helping it hit the ground running.
What sets it apart
Crowdfunding scores as a preferable funding option also because
- It is convenient as one does not have to go and sell ideas many times over to investment firms, who may want to buy the idea rather than invest in it.
- It is easy to find small investors through online crowdfunding as compared to physical outreach.
- Online funding connects campaigns to a wide network of people whereas alternate funding methods connect only to a few investors or banks only.
- Usually, a valuable asset is required to be used as collateral in traditional borrowing methods, whereas only some profits or rewards need to be shared when borrowing via crowdfunding.
- Once the idea is shared online, campaign promoters can also get valuable advice or suggestions for improvement on the idea.
Crowdfunding gives a chance to a person to be an entrepreneur or a social campaigner and helps them fulfil their dreams, support them financially for social work or even for medical help.
It not only provides funds but also helps boost an individual to reach their dreams and goals, helping them move one step ahead in achieving them.
(Edited by Saheli Sen Gupta)
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)