Primer by ValuationApp: “Crowdfunding can be defined as raising funds from the general public usually through internet platforms in order to support a project started by an individual or an organization….Crowdfunding is essentially a subset of Crowdsourcing; a process where organizations reach out to their customers and the general public, and outsource some of their functions to the public in order to get feedback, ideas and solutions. In crowdsourcing, the participants either work for free or for a very small amount…the first historically documented crowdfunding event was the completion of the Statue of Liberty in 1885, where the city reached out to the crowd through newspapers and part of the money required to build the statue was contributed by the citizens…
Several benefits of crowdfunding have been discussed in the previous sections, so in this section let’s cut right to the chase and present points in the most compact form. Through crowdfunding, individuals and organizations can:
- Reach out to a wide range of people all over the world.
- Raise large amounts of funds while simultaneously creating their own brand identity.
- Gain valuable feedback on the product/service/project they are raising the funds for.
- Turn funders into future customers.
- Stop depending on large investment from investors and thus enjoy minimum interference from the investors.
- Increase public awareness about their products and gain free word of mouth marketing on social media.”