Crowdfunding refers to raising project funds from Internet users in the mode of "group purchase+pre-purchase". Crowdfunding uses the characteristics of the Internet and SNS to let small businesses, artists or individuals show their creativity to the public, win everyone's attention and support, and then get the needed financial assistance.

Modern crowdfunding refers to issuing fundraising projects and raising funds through the Internet. Compared with traditional financing methods, crowdfunding is more open, and whether to obtain funds is no longer based on the commercial value of the project. As long as it is a project that netizens like, they can get the first fund to start the project through crowdfunding, which provides unlimited possibilities for more small-scale operators or creators.

Second, crowdfunding mainly has nine operating modes, namely:

1, donation mode

For more than ten years, NGOs have been using this model to attract donations for some specific projects. Since non-governmental organizations will constantly update investors on the latest progress of the project, such donors are more willing to participate for a long time and guarantee multiple donations. The main motivation of investors is socialization, which is usually a good foundation for maintaining a long-term donation relationship.

2. Reward mode

This business model is used by project owners to raise donations for specific projects and get (usually few) non-monetary rewards. This kind of return provided by investors has symbolic value. They are usually much lower than donations to ensure that the project has sufficient funds.

3. Pre-sale mode

If investors are interested in booking and paying in advance, it is feasible to put new products or services on the Internet and find investors. If feasible, it will replace the traditional market research and prove the effectiveness of market demand while providing working capital.

Investors are willing to participate in such crowdfunding projects because they hope that this product or service will come out. Another reason is that they can get a discount on the selling price.

4. Lending mode

By borrowing money for crowdfunding, companies borrow money from a group of people instead of banks. The role of the platform can be diversified. Some platforms are equivalent to middlemen and will also repay borrowers. Other platforms are only used as media, and borrowers and lenders will keep in touch directly after the transaction.

5. Social borrowing

Even if there is no income, some platforms may lend money to social projects. For example, enterprises in developing countries can get small loans without paying interest.

6.P2P loan

Although P2P lending is not necessarily based on goodwill, it is still an interesting new lending and financing model for traditional lending. It has some characteristics of crowdfunding lending, but the main difference is that borrowers and borrowers usually don't know each other. In P2P lending, investors' main motivation is to get (higher) returns. Interest rates are usually based on risk factors. The calculation of risk is based on financial data and personal guarantee.

7.P2B loan

Similar to P2P loan, P2B provides a loan platform for SMEs. So far, this form of crowdfunding has attracted the favor of government funds, such as the British government.

8. Equity crowdfunding

When a company wants to attract a group of people to invest together instead of a business angel or an individual, this financing method is called equity crowdfunding or public investment.

Some investors are mainly interested in projects that are consistent with their own values, and are interested in projects that involve local interests or can create new jobs for the local area. Others really understand the market, the project or the company's business, and are eager to bring money and expertise to help the project succeed.

9. Mixed mode

The mixed mode is also very common, and some platforms have tried the mixed mode of loan and pre-sale. A certain proportion of the funds will be used for loans (interest repayment), and the rest will be used for pre-financing the production of products or services. In addition, for entrepreneurs, the mixed mode or mixed mode of investment forms such as crowdfunding is also beneficial.

Extended data

First, the specific operation process of crowdfunding

1. The project sponsor who needs funds will hand over the project planning to the crowdfunding platform. Creative projects are released on the platform in the form of video clips, pictures and text introductions after relevant audits, and investors choose their favorite projects on the platform.

2. When the project sponsors raise funds on the platform, they set the target amount and raising period of the fund-raising project, and investors interested in the project will provide a certain amount of financial support within the target period.

3. When the project expires, if the target financing is successfully achieved, the project financing is successful, the creator obtains financing funds, and the supporters confirm the funding. If the target financing cannot be achieved, the project financing calculation will fail, and the financing funds extracted from the creator will be returned to the supporters.

4. The project sponsor starts to operate the project, and the investor supervises the project and obtains the project products in return. The return of financing the physical product project is the product, and the return of financing the equity purchase is the equity of the enterprise.

Second, crowdfunding characteristics

1, low threshold: regardless of identity, status, occupation, age and gender, as long as you have ideas and creativity, you can initiate a project.

2. Diversity: The direction of crowdfunding is diverse. The categories of projects on domestic crowdfunding websites include design, technology, music, film and television, food, comics, publishing, games, photography and so on.

3. Rely on the strength of the masses: supporters are usually ordinary people, not companies, enterprises or venture capitalists.

4. Pay attention to creativity: the promoters should first show their creativity (design drawings, finished products, planning, etc.). ) can pass the platform audit, not only a concept or an idea, but also operability.

References:

Baidu encyclopedia-crowdfunding