Crowdfunding Business Model: The Scenario

Funding from the crowd is the talk of the town these days. Crowdfunding in itself is a blooming business which is helping other start-ups get popular and raise funds from every nook and corner of the globe. A crowdfunding business model is such that it is not effected by geographical borders and political turbulences. This article brings forth the crowdfunding business model in all its beauty and serves as an opportunity for readers to reap the benefits of a crowdfunding business model. Apart from looking into the crowd funding business model this article gives an insight into the business models which have been emerging through crowdfunding.

Emerging crowdfunding markets

The downfall of the credit market in the year 2008 was a major breakthrough in bringing crowdfunding into the scene. The first of its kind Kickstarter, a crowdfunding platform emerged amidst this and so did a crowdfunding business model. The inception of Kickstarter worked well, three of its initially successful projects were the Belo Monte-Announcement of War, Pebble and #CowdfundPaRato. The concept of crowdfunding has already marked its legal footsteps in the UK and the US and slowly it is being legally accepted in the other parts of the world.

Emerging Crowdfunding business model

A crowdfunding business model was born with the birth of Kickstarter back in the year 2009. With more and more crowdfunding platforms coming in the picture the sector has undergone transformation to reach what it is today. First thing to know here is that crowdfunding is a commission based business therefore the commission has an important part in forming the crowdfunding business model. The commission part varies from platform to platform and project type to type. The range is somewhere in between 4% to 8%.

Crowdfunding platforms have to be alluring to drive projects to let them showcase on their platform as the crowdfunding business model tells that the more projects end up being on the platform more is the income of the platforms. A crowdfunding business model also has a customer relationships arm which sorts out of the grievances of the projects if there are any. However, the CRM is also responsible to make the crowdfunding process easy for the start-up owners. Other things involved in crowdfunding business model are blogs and tutorials which are knowledge resources on which the start-ups could grow and flourish. The crowdfunding business model offers much more than what is seen. As the crowdfunding industry is thriving, its magnetism keeps on augmenting.

The recent crowd funding business model also show that crowdfunding platforms have evolved from being a fundraising platform to a platform for lending and borrowing funds. Now a days it also gives space for other investors to get close to the crowd. These investors include angel investors and venture capitalists. Other essential parts of the crowdfunding business model include media production, legal services and advisory groups.

The crowd funding business model is growing with more and more people and services finding it useful. The augmentation will surely impact the world in a more positive way.

Crowdfunding Business Model: The Scenario