A Decentralized
Ai System

Developed by Endotech


Details about Crowdfunding

March 3, 2021


If you need funds for your business, then it is a must that you should know about "What is Crowdfunding". In this blog, you will get detailed knowledge about Crowdfunding.

The funds collected by a crowd for funding any project or business; rather, any investors is known as Crowdfunding

For running a successful funding campaign, you need to grab the attention of a large number of audience and try to convince them that your project is worthy of their investment.

This blog is for startups and small business owners interested in learning how they can obtain funding through Crowdfunding.

Businesses, organizations, or individuals fund a new project or venture with small donations as an investment. These new enterprises can get off the ground or launch new projects by receiving the necessary boost to their cash flow. These campaigns can happen via the internet and have set timeframes for when money can be raised and reveal specific monetary goals.

Types of Crowdfunding

Four types of Crowdfunding are available; each has the same basis of receiving money from interested donors. Here's an analysis of each type:

  • Donation: Donation-based Crowdfunding is when people give money to the company without getting anything in return. The people who provide you with money do it for support and your business's growth and nothing else. 
  • Debt: Debt-based donations are peer-to-peer Crowdfunding. This type of funding is the same as a loan. A person can give you some money, and it must be compensated with interest by a specific deadline. 
  • Rewards:   In this, donors receive something in return for their funding. Their rewards can vary the basis of their donation, which     incentivizes higher contributions. Based on how much money individual give for funding, they may receive a token, product or service.
  • Equity: It is a type of investment where others acquire business shares based on their contribution. While some Crowdfunding campaigns don't allow supporters to own a portion of the business, they're supporting, but in this type, they give some shares of their company in exchange for funding. 

Rules of Crowdfunding

Most Crowdfunding sites have particular rules for starting the funding. For example, Kickstarter doesn't allow equity Crowdfunding in which you have to give your company shares to donors. Also, they have a list of prohibited items that you cannot include in your project. It is advisable to follow these rules thoroughly before choosing a platform, so you don't face any future difficulties.

If you ignore the rules, before starting your Crowdfunding campaign, the possibility of success decreases. It is better to research the different Crowdfunding sites adequately to give you a better idea of which platform suits your business well.

Note: Before choosing a Crowdfunding site, review each one's rules to ensure you select the best one for your business. It is advisable to fund only those projects that seem beneficial for you and society. There are lots of Crowdfunding projects available in the market. For example, a newly launched Crowdfunding campaign named DAISY- Decentralized Artificial Intelligence System created by company Endotech. It is a smart contract developed for funding for the AI project.