Through social media and various other platforms, you might have heard the word ‘crowdfunding’. It is one of the emerging and innovative ideas which is boomed after the spread of the internet.
In this article, we shall see what is ‘crowdfunding’, its benefits, concerns, and the way forward.
What is Crowdfunding?
- Crowdfunding refers to the practice of funding a project by raising money from a large group of people. It is relevant for a particular cause.
- It is a way of raising capital using the internet or social networking like Facebook or Twitter or by using some crowdfunding-dedicated websites.
- It helps to improve the presence of small businesses and startups in social media, increases their investment base, and funding prospects.
- There are different types of crowdfunding like debt based, equity-based, cause-based, rewards based, software value token, donation based, litigation, etc.
- Public-Private Partnership (PPP) based on the equity-based model is practised in crowdfunding in India.
- Crowdfunding is not a new concept but has been since ages as Chandas has been collected for religious festivals since years. It has also been used in films, social causes, music festivals etc. It is carried out in various models like peer to peer lending.
Crowdfunding: Project Initiator – Supporters – Platform
Modern crowdfunding model is generally based on three types of actors: the project initiator who proposes the idea, individuals or groups who support the idea, and a platform that brings the parties together to launch the idea.
What are the examples of Crowdfunding in India?
There are several examples of Crowdfunding in India. Some of them are:
- To fund the training of new generation artists, a crowdfunding campaign was launched for preserving the theatre art form Koodiyattam.
- Paralympic badminton star Mark Dharma is crowdfunded to compete at the Thailand Parabadminton International 2017.
Wishberry, Milaap, Miracle Foundation, RangDe CrowdCube and Seedrs are some of the leading crowdfunding platforms in India.
Wishberry funds for creative artists. Milaap is a platform for Charities and Miracle Foundation works for orphans. RangDe is an internet-based peer-to-peer micro-lending platform that facilitates low-cost loans to rural entrepreneurs across India. CrowdCube and Seedrs are Internet platforms which enable small companies to issue shares over the Internet and receive small investments from registered users in return.
A number of other platforms have also emerged recently which are specialized in the funding of scientific projects, such as experiment.com, and The Open Source Science Project.