What are the advantages of online crowdfunding over traditional investment methods?

Compared with traditional financing methods, crowdfunding is more open, and the commercial value of the project is no longer the only criterion. As long as it is a project that the public likes, the first funding for the project can be obtained through crowdfunding, and the scale of the first fundraising is generally not very large, providing unlimited possibilities for more people who operate or create small businesses.

The subtext of this sentence is "the threshold for starting a business was high before, and crowdfunding can help you lower this obstacle". From the actual case, the crowdfunding platform has indeed helped many grassroots entrepreneurs to raise funds and launch established products. This process will be more difficult if you take the traditional financing route, because VC may not be optimistic about your idea, and it will be difficult for you to get VC's approval if you don't have a product to make.

Secondly, in addition to the funds, crowdfunding also has a market research report. This advantage was previously covered in an article by PingWest. In fact, the reason is very simple, because the money comes directly from consumers, and the consumer's recognition and evaluation of your product is a market research, which can reflect the results of your product on the market on a large scale in the future to a certain extent.

One of the implicit values of the crowdfunding model is that consumers are paid for before they make the product. If the project financing is successful, and the actual R&D and production process goes smoothly, then this is equivalent to a large reduction in the cost and risk of starting a business.

Finally, crowdfunding is a good advertising platform. This manifests itself in two ways. First, your project financing is successful, which is equivalent to an advertisement to the public.

Some people see your project but don't contribute funds, probably because they can't judge whether your product will be able to raise enough funds to mass produce it. But when you see people rushing to help you get your money together, they'll become your future customers. Second, your project has been showcased regardless of whether it has been successfully financed.

To whom, to potential investors.

Hope it helps,

1. Product crowdfunding, product crowdfunding projects are generally creative inventions, products or services, so the return of product crowdfunding is the invention of the product or service. Product crowdfunding is based on the amount of investment, to choose the return method to investors, generally there are several stages of division.

2. Public welfare crowdfunding, public welfare refers to a kind of crowdfunding method that does not want to return, and investors generally donate funds or goods to express their love. This is a free, no-return crowdfunding model.

3. Equity crowdfunding, the project of equity crowdfunding is generally a start-up company, the investor gives the entrepreneur funds, and the entrepreneur gives the investor the shares of the enterprise, which can also be said that the investor is through the purchase of the company's shares. The return of equity is generally shares, dividends or profits of the company.

4. Debt crowdfunding Although debt crowdfunding and equity crowdfunding are somewhat similar, the return is not the same, the investor invests in the project, obtains a certain amount of debt, and when the project is successful, the return to the investor is the principal and the promised interest.

Extended information: 1. Fundraising model, individuals provide financial assistance to projects or enterprises in the form of donations, charity, and sponsorship, without seeking substantial financial returns. Typical examples include disaster relief, film production, free software development, etc.;

2. Lending model An individual lends money to a project or enterprise, expects to be repaid, and hopes to get a certain financial return. Since the lender is a large number of individuals and the borrower is also an individual, this lending model is often referred to as P2P lending;

3. The reward model is different from the lending model in that the borrower is not rewarded financially but in kind or service;

4. "Equity model" An individual invests in an entity with a view to obtaining shares in the entity or sharing in the entity's future profits. The diversification of crowdfundraising and return forms makes the dreams of entrepreneurs no longer lonely, and people who have a common vision for their dreams gather together to give wings to their dreams.

There is also sweat, smile, and a sense of accomplishment.

Now that the dream has wings, we want her to be able to fly farther. We need to financially recognize and measure the inputs and outputs, and strive to achieve a surplus that breaks with income and expenditure and minimize uncontrollable risks, so as to provide continuous impetus for the operation of the "Dream Factory". Under different financing and return methods, there are also big differences in the recognition, measurement and risk prevention of financial accounting.

1. Debt crowdfunding.

In fact, it is P2P, crowdfunding in the form of repaying the principal and paying relevant interest, through creditable loans, or mortgages, etc., there are many such platforms in China, for example, Renren Loan. To put it bluntly, I give you money, and you end up giving me the principal and the interest accrued.

2. Equity crowdfunding.

That is, the investor invests in you, and you use the corresponding equity of the company as a way of return, such as the proportion of equity, such as the number of shares. , which is a high-risk investment. To put it bluntly, I give you money, you give me shares.

Of course, when there are too many shareholders, it is easy to lead to too scattered shares, not every partner is so reliable, and the risk is very high, therefore, grasp the equity design model.

Very important. There are also several ** of equity crowdfunding.

3. Charity crowdfunding.

There is no direct return, and participating in charity is a good package for both individuals and businesses. It is a manifestation of spiritual value, to put it bluntly, I give you money, and you give me a sense of accomplishment in helping others.

4. Product crowdfunding.

For example, a company's product, which is still in production or only pre-sale, through crowdfunding, to get the user's financial support, the way to return is to get the product, the product can be a virtual service, or some activities, events, or physical objects. To put it bluntly, you give me money and I give you the product you want. The benefit of this is that for the user, the advance payment is made.

Don't worry about not being able to buy the product, for the crowdfunding initiator, the product has not yet been produced, it is crowdfunded in advance, and then the advance payment is used to produce the product according to the actual quantity, at least it can ensure that the product cannot be sold, and it also saves a lot of costs.

1. It can reduce the financing gate and effectively promote micro-entrepreneurship.

Micro-entrepreneurship refers to the entrepreneurial activities that use micro-platforms or network platforms as important carriers to carry out creative development in subtle fields at a small cost. Its main features are that it can be copied in batches, the investment is small, and the benefits are fast. Micro-entrepreneurship is one of the effective ways to alleviate the employment pressure of college students in China.

However, in the context of the current financial regulation, the problems of poor private financing channels and high financing costs have hindered the development of micro-entrepreneurship, and crowdfunding is a more popular financing method, which provides micro-entrepreneurs with the possibility of obtaining lower cost and faster funds, and can well solve the problem of financing difficulties. The project sponsor collects the public's micro capital or nuclear funds through the crowdfunding platform to obtain funds for engaging in a certain entrepreneurial activity, breaking through the shackles of the traditional financing model, and each investor can also participate in the planning, consulting, management and operation of the project.

Due to the open nature of the Internet, investors are not restricted by region, occupation and age, as long as they have certain financial ability, management experience and professional skills. This kind of micro-entrepreneurship activity relying on the crowdfunding platform has not only realized the crowdfunding concept of crowdfunding, brainstorming, and risk sharing, but also accumulated experience and people's hidden pulse.

2 can stimulate grassroots innovation and bring producers and consumers closer.

The crowdfunding model is not only an investment and financing activity, but also an innovative model that stimulates grassroots innovation.

The technical characteristics of the Internet and the process of business democratization determine the arrival of the era of grassroots innovation, where everyone can give full play to their own innovation and R&D capabilities, and use social resources to turn their ideas into real products.

The crowdfunding model provides a platform for each grassroots innovator to access important resources such as funding, marketing, and connections, while different investors, with different professional backgrounds and different values, can directly put forward their own opinions and opinions on the project, and the project sponsors will carefully evaluate and further improve the project.

The interaction between the two sides shortens the distance between producers and consumers, and this behavior of focusing on user communication and experience is similar to the behavior of mass customization stove tuanxiang, which greatly reduces the market risk of the product.

1. Low threshold: regardless of identity, status, occupation, age, gender, as long as you have ideas and creative ability, you can initiate projects.

2. Diversity: The direction of crowdfunding is diverse, and the project categories on the domestic roll call time include design, technology, film and television, food, comics, publishing, games, photography, etc.

3. Rely on popular power: Supporters are usually ordinary grassroots people, not companies, corporations, or venture capitalists.

4. Focus on creativity: The initiator must first display his creativity (design drawings, finished products, planning, etc.) to the extent that it can be displayed before it can pass the review of the platform, not just a concept or an idea.

Advantages of the crowdfunding model:

As a new investment and financing model, crowdfunding has four significant advantages, which are analyzed in combination with the "paper" wallet oneday project.

1) Low threshold.

From the perspective of project initiation, compared with other financing channels, crowdfunding basically has no or only very low requirements, as long as there are ideas and creative projects, they can be launched and raised through crowdfunding.

2) Diversification.

The direction of crowdfunding is diverse, and the project categories on domestic crowdfunding include design, technology, film and television, food, comics, publishing, games, photography, etc.

3) Grassroots.

The proponents of projects are often ordinary people, not professional companies, corporations or venture capitalists.

4) Innovativeness.

Most of the crowdfunding projects launched by the participants of the crowdfunding are very dynamic and innovative. The essence of crowdfunding is that the project is recognized and supported by everyone, so that the required funds can be raised from supporters. To get more support, the project often has to be innovative, dynamic and executable.

2.Disadvantages of the crowdfunding model.

Raising funds through crowdfunding platforms, whether it is a supporter of the project or the initiator of the project, the crowdfunding platform provides a low entry threshold for it, which greatly reduces the difficulty and cost of investment and financing. However, compared with the advantages of crowdfunding, the disadvantages of crowdfunding are also very obvious.

First of all, subject to the restrictions of the relevant legal environment, all projects on crowdfunding cannot be returned in financial forms such as equity, bonds, dividends or interest, and the project initiator cannot promise any financial benefits to the supporters, but must be in return with its corresponding physical goods, services or content, otherwise it may involve illegal fundraising, and the circumstances may even constitute a crime.

In addition, there are many crowdfunding models, such as reward crowdfunding, fundraising crowdfunding, equity crowdfunding, and loan crowdfunding, and there are multiple types of products under each type. However, it is precisely because of these many business contents that there is no clear definition and standardization in the field of crowdfunding, and most of its products are non-standard products, so it cannot achieve large-scale expansion like P2P operating funds, and the pricing mechanism is difficult to be clear and clear, which also hinders the expansion and development of the crowdfunding model.

Regardless of the advantages or disadvantages, it is not yet known when we will be able to embark on a crowdfunding path that is suitable for China's national conditions and has Chinese characteristics. But what is certain is that we are already quietly on this road, and it will be wider.

The concept of crowdfunding is translated from the foreign word crowdfunding, that is, crowdfunding or crowdfunding, which is translated as crowdfunding in Hong Kong and crowdfunding in Taiwan. It is composed of promoters, co-investors, and platforms. It has the characteristics of low threshold, diversity, relying on the power of the public, and focusing on creativity.

Internet crowdfunding is crowdfunding launched with the help of Internet channels. Whether the model can ensure the safety of funds and effective value-added depends on everyone's sufficient knowledge of business risk judgment.

Hello! Crowdfunding, translated from the foreign word crowdfunding, that is, crowdfunding or crowdfunding, translated as "crowdfunding" in Hong Kong and "crowdfunding" in Taiwan. It refers to the mode of raising project funds from netizens in the form of **+ pre-order.

Crowdfunding leverages the nature of the Internet and SNS to allow small businesses, artists, or individuals to showcase their ideas to the public, gain their attention and support, and then get the financial assistance they need.

Relying on the technical advantages of big data, cloud platforms and mobile application ecosystems, crowdfunding accurately locates the needs of netizens, fully guarantees the safety of investment with the help of standardized financial tools, strictly controls financial risks, and raises project funds through crowd fundraising. Through crowdfunding, the dilemma of financing difficulties for small and medium-sized enterprises will be broken, and then the development of the real economy and structural transformation will be promoted. In addition, crowdfunding is based on meeting the personalized information consumption needs of consumers, and by building a win-win ecosystem for consumers, producers, investors and financiers, the proportion of direct financing is increased and the financing cost is greatly reduced.

Crowdfunding has the following four characteristics:

1. Low threshold for participation: For the project initiator, regardless of identity, status, occupation, age, gender, as long as there are ideas and creative ability, the project can be initiated; From the perspective of the project consumer, you can purchase from 1 yuan, without any restrictions on identity and status.

2. Strong interactivity: By integrating the sense of participation and entertainment attributes into professional financial products, the participation process of crowdfunding is more interesting.

3. Personalized customization: The crowdfunding model is different from the simple investment model, and the pursuit is no longer a simple return on funds, but a product or service customized based on one's own personalized needs and interests. Taking movie crowdfunding as an example, for consumers, in addition to financial benefits, they can also get personalized consumption**, such as celebrity signed photos, celebrity blessings, movie participation opportunities, draft voting opportunities, etc.

4. Win-win ecosystem: Through the crowdfunding model, consumers can customize their own personalized products and services, and producers can obtain funds and early marketing and promotion opportunities, thus realizing a win-win ecosystem for consumers, producers, investors and financiers.

5. Good risk control: Since crowdfunding is the best for the majority of netizens, crowdfunding will strictly control financial risks, introduce large financial institutions, take consumption as the core, special funds, property isolation, and full fund monitoring and information disclosure, so as to realize the dual protection of consumers and crowdfunding models.