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Until recently the concept of crowd-funding was seen as a niche segment, however, the recent increase in popularity of Kickstarter and it’s contemporaries had propelled the finance model of the crowd-funding model completely into the mainstream business. Many products were launched recently using the crowd-funding model such as the Fashion Entertainment’s own brand of watch series. They approximately raised over $20,000 through one of the Japanese crowdfunding site Makuake to launch the watch into the market. They repeated the same trick in the year of 2016 and succeeded again. Since more companies and investors are embracing this model, what does the future hold for the crowd-funding concept? And why are more and more organizations opting for a crowdfunding model?

Why is crowdfunding a good business concept?

Crowdfunding remains a proper choice

A radical response: Ranging from small DIY projects to pro-finance crowd-funding remains a proper choice. While many people assume and associate crowd-funding with the empowerment of individual projects which usually ranges from saving local theater halls to financing a cult movie or a game sequel. However, altogether a more corporate view of the medium has emerged in the recent years. There has been a gradual shift towards larger Corporate organizations and venture capitalists who are increasingly involved in bigger scale crowd-funding operations. It is slowly becoming a bigger platform for business than people perhaps realize. The concept, on the whole, has shifted from localized businesses to being more positioned under the corporate leadership banner in some instances.

Consistent Equity for all

Equity model is one more interesting trend which is ramifying the future of this model. The basis of equity funding depends on backers who help in financing start-ups and their products by buying shares of the company in question. This particular approach can effectively transform a backer into an investor with a range of possibilities.

Excellent return on Investment

The role of a backer in crowdfunding has also gradually transformed over the years. Instead of having their pay off by being in the project itself and having any rewards attached to it, off late crowdfunding is often seen as a tool for upcoming venture capitalists to get a better return on investment.

Helps in positioning the product

Going for crowdfunding, having a great product is just not enough. Firms must be able to position their product correctly to their target market. They need to understand their audience, who they are, why do they need the product and then position their product according to the data they get from the research. Convincing your crowd-funders is more important, than your target audience, they need to believe that this product will be a success as they are the fundamental investors. Once a cohesive business plan is enabled it will take lesser time to sell it to your potential crowd funders.

Future opportunities for Crowdfunding

The evidence of Kickstarter’s success has helped the business world in learning and understanding how effective and easy it is to raise money through small contributions from a large number of people. Ever since the popularity of crowdfunding continues to skyrocket, many small businesses and start-ups are taking advantage of the various trends that keep emerging from this segment in the recent years. Following are some of the bold predictions to watch out for.

Crowdfunding will continue its status as a popular funding choice

Earlier crowdfunding was considered a novelty and was rare and exceptional. People preferred more traditional methods such as bank loans, venture capitals and borrowing money from lenders. However, these days announcing your campaign is very common as other options. In fact, last year Forbes reported that crowdfunding is expected to surpass venture capital as favorable means of financing.

Non-profit organizations will benefit more

While businesses in any segments can use the crowdfunding concept, it’s the non-profit segment that will particularly benefit from the growth of this financing method. According to Bill Clerico, CEO and Co-founder of WePay “Charities are seeing a twofold benefit from Crowdfunding”. He added “Firstly it’s proven to be an extremely efficient way to solicit and manage donations compared with other methods. Secondly, the additional social and viral potentials of Crowdfunding campaigns can give smaller charities a cost-effective method to promote awareness of their cause.

Content source: https://www.agriya.com/blog/crowdfunding-marketplace-platform-business-idea-future-opportunities/

This post has been moved to the Kickstarter Tips and Advice section.