Among the wide variety of alternatives into which deep pockets can diversify their savings, crowdfunding has lately been singled out thanks to the brisk spread of the Internet.
An extensive
range of options are to be found effortlessly on the internet when it comes to hunting
down uncommon ventures to be crowdfinanced: from artists seeking money to conceive
of, realize and promote their latest project, to owner communities or schools
eager to turn their old carbon boilers into snazzy solar panels, able to generate
cleaner energy.
Far from
being a sparkling brainchild, but rather a pretty much mature one, crowdfunding
resembles traditional investment funds. However, there are a few dissimilar features
worth mentioning.
Firstly, these
are not banks, but rather tech companies, the ones that have developed and
rolled out the increasing number of websites that offer this service.
Secondly,
by putting money into the diverse ventures and schemes available, the investor
will not always get even a percentage of the business, let alone a reimbursement
at a gain, should the project take off and hit the shelves; however, in many cases,
there is a colorful reward. Let's say, for instance, that someone has helped a
singer record a new album. Depending on the money that the investor has forked
out, he could enjoy anything from a free download before the release, to a seat
at the premiere performance. Being able to read one's name on the
acknowledgement section of a new book is another sort of reward which has
become popular.
Thirdly,
investment funds have sturdy companies beefing up the management side of the
business and, more importantly, providing liquidity under certain conditions,
should an investor need to cash out. In comparison, should someone who has crowdfunded
a business want to sell part of their shares, they would have to wait until
someone else decided to invest in the same project.
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