If you are a small business starting up in this competitive environment, it is essential that you should know the options you have to raise capital. In our articles, we looked at what is venture capital and the various types of VC.
In this article, we will explore few best crowdfunding platforms in India that can help your business grow the way you plan to with the help of access to funds. We will talk about what is crowdfunding, the benefits and downsides of crowdfunding, and the best crowdfunding platforms in India for smaller businesses getting started.
What is crowdfunding?
Crowdfunding is a process by which you can raise money to finance your business or project from a large number of investors (a crowd, as the name suggests). The amounts given are relatively small depending on the capacity and willingness of the person making the contribution. Crowdfunding is also often used as a means to fund health treatments and in those cases, it is more of a donation than an investment.
People reach out to potential investors create their request for funds on a crowdfunding site and then spread the word using social media. There are restrictions on who can fund a business and the amount they can contribute. Crowdfunding sites act as a conduit between those who want the funds and those who are willing to invest. The crowdfunding site generate revenue through a percentage of the funds generated.
How does the return of the funds work in crowdfunding?
When you go for the option of crowdfunding for your business, then there are some ways in which you can pay back. Some businesses offer a bit of equity in return for the crowdfunding contribution. In other cases, you get early access to the product that the business is working on. This lets you use the product much before the rest of the world. An option for early access is popular for game launches.
Let’s take a look at some of the popular crowdfunding platforms in India and their main focus to help you understand what would work for your business.
Fundable
As a site that focuses mainly on small businesses, you will find that this site features campaigns across various business sectors. Not only that, this site also offers affordable diagnoses and other experiences. With the main purpose of funding small businesses, this is a suitable site for smaller businesses.
Kickstarter
As the first crowdfunding platform in India, this site is known to be popular for supporting creative projects like books, movies, etc. The people who seek crowdfunding have the choice to offer different kinds of rewards to those who invest.
Indiegogo
This is a marketplace and funding site with fund raising as the first step. Once you have run a successful campaign to raise funds, you can take it to the next level by raising funds again. Due to the number of campaigns that are run on this site, there is sometimes an issue with the authenticity of the ideas.
Wishberry
This site is strictly restricted to creative projects and also offers consulting services like technical support and marketing services. This is also a reward-based site that let funders and donors get rewards from the project they fund.
Ketto
You are most likely to be familiar with this site as you often get requests for funding related to health care of patients. This site has separate sections for tax relief, urgent funds, etc. The purpose of this site is to bring social change and raise awareness.
Catapoolt
With a focus on music, startups, technology, and films, you can tap on funds via this platform for both business and personal purposes. You can not only access funds, but also access their network of incubators, accelerators, marketing, and other numerous communities for help witty your business.
TheHotStart
TheHotStart was launched in the year 2014. The projects on this site are free to start on and you have to pay 10% of the funds you have raised through this platform to TheHotStart. As a crowdfunding site of renown, TheHotStart has been helping numerous Indian businesses with numerous projects that include food and beverage, medical care, education, and more
As a business on the verge of taking off to newer heights, funding is always going to be one of your biggest worries. Thankfully, in today’s world, you have plenty of options like angel investors, venture capitalists, and crowdfunding.
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