Crowdfunding Advantages and Disadvantages


What is Crowd-Funding?

Crowdfunding is a method of raising large funds from various sources i.e, friends, family, individual Investors etc. Crowdfunding is the source of collecting big funds in large numbers of people.

Crowd-Funding Advantages and Disadvantages

Crowd-Funding Advantages for Investors

  • It reduces the risk of Investment.
  • It is beneficial for the long-term.
  • It does not require a high amount of investment.
  • It helps the investor to understand the taste of the future.
  • It provides a high ROI on investment.

Disadvantages of Crowd-Funding for Investors

  • It is futuristic, So it has a high probability to kill the investment.
  • Crowd-Funding needs many people to start the project, sometimes producers close the program. Because not getting investment.
  • Sometimes Investors do not get a good return on investment.
  • It has a fair loss of investment.

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Advantages of Crowd-Funding

  • Business does not need to give a high return on  Investment.
  • It is the risk-less process of collecting funds.
  • it is a good way to test the public reaction to your product/idea.
  • Business can convert their Investors into Customer.
  • it is the best alternative to Bank loan.

Disadvantages of Crowd-Funding

  • It is time taken process.
  • It is hard to get many investors.
  • Hard To win Investors trust.
  • If the project fails, it affects the whole image of the business.
  • It discloses the private decisions of the business.
  •  It has higher chances to fail.