Crowdinvest Experiences: How suitable is Crowdinvest for crowdfunding projects?
Crowdfunding refers to financing by the masses. This makes it possible, for example, for projects with little capital to get started and successfully make the leap to market. Crowdfunding was first and foremost popular in the software industry. Websites such as Kickstarter enable developers of indie games and smaller projects to receive money from fans and enthusiasts. Crowdfunding is also particularly popular in the real-estate sector. How crowdfunding works, what experience you need and which platforms are best suited for property projects—this article covers all of that and more.
The most important facts at a glance
Crowdfunding literally means mass financing. The name says it all.
Crowdfunding was first introduced to the software industry through Kickstarter.
In crowdfunding, projects try to excite outsiders.
Fans and interested parties support a crowdfunding campaign with pledges.
The top crowdfunding platforms from Germany
Anbieter |
Zielgruppe |
Kosten |
|---|---|---|
1. Kickstarter
 |
Größte und bekannteste Crowdfunding Plattform | 5% der Einnahmen 3-5% Bearbeitungsgebühr |
2. Indiegogo
 |
Zweitgröẞte Plattform für Crowdfunding | 5% der Einnahmen |
3. Patreon
 |
Technische Produkte | 5% per Transaktion |
What exactly is crowdfunding?
Crowdfunding is an English term that stands for mass financing. The name is accurate, because instead of project or company leaders, banks or investors, the masses—people like you and me—provide the financing for projects. The project or venture is published on a website and presented to the masses in this way. Interested parties and fans can then support the project with a so-called pledge. In return for their support, backers receive a reward such as a free product after completion, a mention in the credits, or another perk. Exactly what the perk looks like also depends on how large the respective pledge was. The advantage is that there is no need for one large investment; instead, many—perhaps even millions—of people like you and me support the project with small amounts. In the end, the crowd often adds up to a very large and impressive sum.
The concept of crowdfunding itself is not new. Over the last ten years, however, websites like Kickstarter and Indiegogo have succeeded—thanks to the internet—in making crowdfunding easily and conveniently available to the general public as an option. There is no longer any need to search for interested parties through newspapers and classified ads. Instead, a simple link is enough, and there are now many millions of users who look every week on Kickstarter and other portals for interesting opportunities.
How does a crowdfunding campaign work?
Thanks to the internet and the crowdfunding platform, launching such a campaign today is very easy and can be done in a short time. First you have to choose a provider. The various platforms each target different audiences. Then you register for an account and can set up your project. A project description, photos and videos, etc. are part of it. Depending on the platform, your project must then be reviewed and activated by the site operators to prevent fraud. Certain requirements and conditions must be met for this.
Once the profile and your project are activated by the website, they are visible to everyone, and anyone who is interested can make a pledge. Money is collected over the course of the campaign. Whether a payout takes place or not also depends on the platform. Some providers, like Kickstarter, require you to reach the funding goal you set in advance. Other platforms pay out the funds raised at the end of the campaign whether the goal was reached or not; only the platform’s costs and fees are deducted.
As soon as your campaign is online, you can give it extra momentum through targeted marketing. Share the link with information on social networks, in your blog and newsletter, on the company website, and on other portals or in relevant media you use for marketing. After that, you need to manage the campaign and wait for results.
The advantages of crowdfunding
A crowdfunding campaign offers you a variety of valuable advantages compared with other forms of financing and, in addition, is a good and simple way to raise the necessary start-up capital with a good idea. The most important advantages are:
• Validation of your ideas
• Building a following
• Creating an accessible funding source
The disadvantages of crowdfunding campaigns
• There is now a lot of competition and many competitors
• Your idea really must be innovative and creative
• Requires a lot of time and effort to be successful
Vorteile des Fundraising |
Nachteile des Fundraising |
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What ventures is crowdfunding suitable for?
Basically, there are only a few restrictions or obstacles in crowdfunding regarding the projects themselves. Anything you can make interesting to people and market well is suitable for crowdfunding. There are only a few exceptions. Nevertheless, the most successful projects have a few things in common. These are:
- A specific product: If you look at the biggest crowdfunding success stories, you will find that most of them focus on financing individual products, not entire series or product lines. There is a reason for this: funders tend to back tangible things they can identify with or use themselves. Broad ideas, on the other hand, are often less tangible and therefore less interesting. For the best chance of success, seek support for your best product. You can always build a business later once your first idea has taken off and you have the necessary capital.
- A targeted, niche audience: Create a product that meets a need or fills a gap, and then find a way to reach exactly the market where that need is greatest. Founders often develop products that solve a problem that exists in their own lives, as MindJournal did when they couldn’t find a journaling tool with the features the team needed. Develop a prototype that meets those requirements.
- Strong differentiation: To generate excitement and attract backers, your product must be something that cannot be found elsewhere. It must be something special that stands out from the crowd. Do your research to make sure your product is unique.
What exactly is Crowdinvest?
Despite what the name might suggest, Crowdinvest is a platform for crowdfunding, comparable with Patreon, Indiegogo or the market leader Kickstarter. The name is somewhat confusing because it gives the impression that it is a portal for crowd-investment, which it is not. The platform was founded in South Africa in 2014, is currently in the test phase and has managed to establish itself in several countries, including the United Kingdom.
In terms of how it works, the platform differs only slightly from other providers. Project leaders and companies can present their project on the portal and thus gain new backers, while investors have the opportunity to support projects and ventures that interest them. The target areas or specializations of Crowdinvest are equity and property.
How suitable is Crowdinvest for a campaign?
Basically, there are only a few restrictions or obstacles in crowdfunding regarding the projects themselves. Anything you can make interesting to people and market well is suitable for crowdfunding. There are only a few exceptions. Nevertheless, the most successful projects have a few things in common, namely:
Crowdinvestment and crowdfunding are becoming increasingly relevant in Germany as well. Due to the growing interest, it is not surprising that more and more portals and platforms on the subject are coming onto the market. Especially for newcomers, it can therefore be very difficult to find a reputable and suitable provider. Crowdinvest is also a platform for such investments. It is the first crowd-investment platform from South Africa. Although the project was launched back in 2014, it is only now in early access—in other words, in the test phase. Nevertheless, Crowdinvest has gained a foothold in several countries and is enjoying great popularity. But how suitable is Crowdinvest for an investment or a funding campaign?
As so often, there is no clear answer to this seemingly simple question. Many factors and criteria come into play and must be taken into account when making a choice or decision. In particular, it depends on the purpose of the venture. As with crowdfunding, most crowdfunding platforms target specific audiences and specialize in supporting certain projects. Crowdinvest is specifically geared toward the property and equity sectors. So if you want to invest in such projects—or your venture falls into this category—Crowdinvest could be a suitable partner. But even if that is not the case, you may still be able to present your project on Crowdinvest.
So how good is Crowdinvest for a crowdfunding project? If you decide on an investment or a campaign on the website, you will find an innovative project with a motivated and very active team. If the project also involves equity or property, you will benefit even more because you belong to the platform’s target group. Nevertheless, one should not forget one thing: Crowdinvest is a new provider that is only just in early access. This may put off some investors or customers. In fact, there is no guarantee that the project will really succeed and eventually emerge from the test phase. On the other hand, a certain amount of risk is simply part of crowdfunding. After all, it can happen anywhere and on any site that a project does not deliver and the investment was in vain. There are no reports of risks that Crowdinvest keeps the money or cannot pay out.
In the end, however, you have to make the decision yourself. We recommend thorough and extensive research on the subject and, if necessary, a comparison with other platforms and providers before committing to a campaign or investment.
The top crowdfunding platforms
Anbieter |
Zielgruppe |
Kosten |
|---|---|---|
| 1. Kickstarter
|
Größte und bekannteste Crowdfunding Plattform | 5% der Einnahmen 3-5% Bearbeitungsgebühr |
| 2. Indiegogo
|
Zweitgröẞte Plattform für Crowdfunding | 5% der Einnahmen |
| 3. Patreon
|
Technische Produkte | 5% per Transaktion |
Conclusion and summary
This brings us to the end of our article on crowd investment. You now know that crowd-investment developed out of crowdfunding. Unlike funding, however, investment is not about supporting a project in exchange for a pledge, but about participating in the venture. Investors who take part in crowd-investment become shareholders in the respective company, property or whatever the objective of the venture is. Accordingly, they also share in the profits and can reap large gains. On the other hand, the risk is also high, because in the event of a loss the investor may lose all of the capital invested. Nevertheless, it is a popular form of financing that is often easier than going through the bank. We hope that our article has helped you understand the topic better and assisted you in deciding on or choosing a platform.
