A month ago, I received a mail. “I am looking for seed funding for my start-up. Can you please guide me on how to get financing to begin the company? Is it possible to raise money from crowdfunding in India?”
I have been getting such requests from budding and aspiring entrepreneurs to start their businesses.
Have you ever wondered how crowdfunding platform works and how they help you raise money for your immediate need? Despite making a noble cause by the crowdfunding platform, why they still not gained momentum and trust in India and questioned its authenticity and legality?
On the other hand, Why the branded company like Apple-Pay, Sony- First Fly, Amazon-Wing, etc., has turned around their business and developed unique & innovative products in their product and services line using crowdfunding?
I also had the same question, and I decided to do the reality check of a crowdfunding platform in India.
As per the Statistia, In India
- Transaction value in the Crowdfunding segment is projected to reach ₹604.0m in 2021.
- The transaction value is estimated to show an annual growth rate (CAGR 2021-2025) of 0.8% resulting in a projected total amount of ₹624.1m by 2025.
- The average funding per campaign in the Crowdfunding segment amounts to ₹396,278 in 2021.
Before we know about the crowdfunding platform and its works, let us take one step back and understand what crowdfunding is?
What is the Crowdfunding?
Crowdfunding is the strategy to raise funds (a small amount) from multiple backers or donors through an online platform or social networking site for a specific project, venture, or social cause. It’s not a new concept in India but can understand as taking the ‘Chanda’ from the online platform.
Here, the raiser/originator requests the above cause or his creative work, and backers/donors support the cause without expecting money back through the contribution platform or crowdfunding platform, CFP.
Crowdfunding is a new and innovative way to provide a modest amount of raising funds to young entrepreneurs and technology professionals who need early-stage or seed capital for start-up companies, spur entrepreneurship.
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