According to experts, there are five key benefits of crowdfunding platforms: efficiency, reach, easier presentation, built-in PR and marketing, and near-immediate validation of concept, which explains why crowdfunding has become an extremely useful alternative to venture capital (VC), and has also allowed non-traditional projects, such as those started by in-need families or hopeful creatives, a new audience to pitch their cause. To date, $34 billion has been raised through crowdfunding initiatives, adding roughly $65 billion to the global economy in line with projections that show a possible $90 billion valuation for all crowdfunding sources, surpassing venture capital funding in the process. [2]
Limitations of Current Crowdfunding Platforms [1]1. High fees: Crowdfunding platforms take a fee for every project listed. Sometimes, this is a flat fee while others require a percentage of the total proceeds raised by contributors. This cut into the availability of funds and strains the fundraising process when start-ups are looking for every single dollar to help.2. Fine print rules and regulations: Not all platforms accept services as a possible project and demand real tangible products, such mindset cripple’s ...
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