Types of Crowdfunding
There are many types of crowdfunding available. Finding the right fit is one of your first important decisions.
Our services
Types of Crowdfunding: Overview
The following overview provides the general information you need about the types of crowdfunding available to begin your journey. Our services cover all of the crowdfunding types below.
Equity Types of Crowdfunding
Learn how to decide when equity crowdfunding is the best choice, and then how to time and design your equity crowdfunding campaign. Equity crowdfunding has become the most popular form of opportunity, and it carries the highest potential reward. It also carries the highest risk.
How much equity?
How much equity should you give up?
Where to look?
What are the best equity crowdfunding platforms?
How much return?
What are the chances it will be a win-win?
When to act?
When to turn to the crowd for best results.
Debt Types of Crowdfunding
Debt crowdfunding may be safer than equity crowdfunding in some ways, since it caps investor upside, but it also has the risk that you have to pay regardless of the degree of your success.
.
How much debt?
How much debt should you take on to accomplish your goals?
Timing
When should you start your debt crowdfunding campaign
How much return?
What percent return will motivate investors but be fair to you?
The effect
What will the effect be on your bottom line, now and going forward?
Rewards and Donations
Rewards-based types of crowdfunding allow you to tap into your fans and trade meaningful and exciting perks and rewards for their donation. It’s hard to raise as much this way as with equity and debt, but you can still raise a significant amount with these types of crowdfunding
What rewards will be meaningful
What are the best possible perks and rewards for your fans?
Can you fulfill your promises?
Can you fullfil the rewards and perks on time and as expected?
What levels of donations for rewards
How much should you expect people to pay for the perks?
Can your Fans become Investors?
Can you do a later debt or equity round with these fans?
insights
Other Types of Crowdfunding
MIxed Equity and Debt
Sometimes founders will offer debt payback soon and equity for the longer term.
royalty payments
Crowdfunding can be used to create music or other royalty-type instruments
safe agreements
These unique agreements involve a conversion event for investors actually to own the equity.
Trends in Crowdfunding Types
What will be the biggest news about types of crowdfunding in 2024?
Here is our guess:
1. Educational Types of Crowdfunding Will Expand
Given that higher education often costs more than the amount of public or subsidized loans available, peer-to-peer student loans may expand in popularity and become one of the types of crowdfunding that investors are more aware of. As a group, these loans are relatively low risk, and even though the percentage that can be charged is reasonably low, that may be balanced by the fact that some investors may find personal satisfaction from going this route.
2. Equity Crowdfunding Types Grow in Popularity (Again)
Equity crowdfunding gets much attention and is the most exciting of the types of crowdfunding and peer-to-peer investing. While the number of potential equity crowdfunding pitches may stay reasonable, the amount of money invested and the notoriety some successful examples receive push this type of investing to more significant notice.
3. Peer-to-peer Lending for Business Also Booms
Peer-to-peer business lending may also find increased popularity, primarily through sites that aggregate requests into large groups to reduce risk and create a relatively stable return. As the returns remain durable and well-established, more people will enter this investment type to round out their portfolios.
4. Human Capital Contracts Enter as a New Crowdfunding Type
Finally, we can foresee human capital contracts for graduate school and occupational training increasing in popularity, especially for those pursuits that often lead to success. For example, investors may find that promising students who choose to go to medical school are a good investment or that people who train to be electricians often find success.
As more people see that the various types of crowdfunding and peer-to-peer lending are not just forms of investments that are exciting to watch on TV, and they see how easy it is to post a pitch or look through others’ pitches on any number of websites, we will likely see this form of investing continue to grow.
More Questions About Crowdfunding Types?
We’d be happy to answer any questions you have about the types of crowdfunding available, and of course all initial consults are free.