Advantages and characteristics of crowdfunding

Advantages and characteristics of crowdfunding

Introduction: Crowdfunding is a familiar financing method. For entrepreneurs, how to raise funds is always a concern. Today I will tell you about the advantages and characteristics of winning.

Crowdfunding, as its name implies, is a financing method for the public to raise funds together.

Low threshold is its main feature.

Because the professional threshold is low, the entry threshold is lowered, and almost all projects can be crowdfunding; Because the capital threshold is low, it reduces the investment risk of investors, so there is a high degree of participation. Therefore, crowdfunding was all the rage.

For example, the emergence of crowdfunding coffee and crowdfunding bars is actually to let people realize their boss dreams and store manager dreams at a very small cost. There are feelings here, dreams here, and entrepreneurship here, but because everyone can achieve things that they originally needed a lot of money or may never be able to do, their participation is very high.

However, Xiao He's success also failed me. The low threshold not only has a broad mass base, but also makes many problems unable to be effectively solved, the most important of which is management. There have been many incidents in which principals cheated other participants.

This led to crowdfunding being questioned a lot later, but don't forget that it only provides multiple solutions to a problem, that's all. As for other problems, it is not in it, but in others.

If we think that the failure of the project is due to too many participants, then there will be no joint-stock company, and there is no need to set an upper limit of 50 shareholders in a limited company. Wouldn't it be better to be a sole proprietorship company? As a matter of fact, we found that those well-developed large enterprises have not just one or two shareholders, but many.

Applicability of crowdfunding

In practice, crowdfunding has wider applicability and can be said to be a universal model.

1, life-style equity investment

The same is equity investment. Venture capitalists value projects with high growth and market scale in a certain period of time, while crowdfunding is very life-oriented. As long as you like, you can raise funds for cake shops, coffee shops, bars, intermediaries and many other real-life projects.

2. Use other people's money to do things

There is a production mode that is recognized by people, and that is order production. The characteristic of this production mode is that the manufacturer can realize zero inventory and make the capital flow faster. Now the mainstream crowdfunding project is actually playing this kind of order-based sales, even better than this.

Because netizens are optimistic about your goods to pay in advance, this is a pre-sale advance payment. If the final product is unqualified, it will also be paid by netizens in advance. If it fails to meet expectations in crowdfunding, you can give up this product to avoid traditional shipment. No one needs to worry about the handling of the goods.

For example, Pepsi once wanted to launch a Pepsi mobile phone and launched crowdfunding. In the end, crowdfunding failed, and Pepsi did not enter the mobile phone industry, which saved a lot of losses for Pepsi.

3. More public participation.

Love crowdfunding and dream crowdfunding can help many people realize many things, realize their global dreams, go to foreign countries to soak in marathons, make documentaries and donate money to those in need.

The problem of crowdfunding

The biggest problem of crowdfunding is the low threshold. Due to the public participation and low threshold of crowdfunding, many participants themselves do not have the corresponding ability, which has brought obstacles to the development of equity crowdfunding projects, so many crowdfunding coffee and crowdfunding bars have accidents. That's the reason.

Because everyone thinks that the threshold of crowdfunding funds is low, what three or five people used to do is now poured into thirty or fifty people to do it, but the number of people has increased and the management difficulty has increased.

The other is that crowdfunding projects tend to focus on areas with low professional thresholds. Because of the higher professionalism, few people will participate in the field of crowdfunding, so this has caused many crowdfunding projects to be suitable for opening small shops and not for opening large enterprises.

When the difficulty of management increases and the level of professionals is low, the problem of equity crowdfunding occurs frequently.

So if you want equity crowdfunding, don't forget to find a professional manager for your project.

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