Here Are 5 Answers To Crowdfunding Questions You Have Been Meaning To Ask

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Crowdfunding seems to be one of the most popular financial options startups are considering outside traditional lenders. Most would even say that this is the modern day version of how business startups would do it in the past. Rather than face to face meetings with each and every investor, social funding is able to reach out to a lot of people all at the same time is a little time as possible.

Hinged on technological advancements especially in the field of communications and computer development, crowdfunding is able to help an initiator put together a proposal and send the same to a large group of people. Financial technology has also come a long way in helping facilitate the funds that form a big part of the platform.

But as you start to understand the concept of social funding whether as an investor trying to decide the authenticity of the platform or as a project initiator looking at the viability of the idea, you would start to form questions in your mind. You might have a hard time answering all of them so here are some of them.

Crowdfunding questions you want to ask

Below are just five of the most common questions you want to ask about social funding but never had the chance to do so.

Why do I have to help them with their financial problems when I have my own issues to solve?

Everyone is fighting their own battles that you know nothing about so the same can be said about your situation. But what world will we live in when you cannot rely on others for help. Regardless how strong and independent you are, there will be times where you would need the help of other people. With this in mind, know that others would need you help as well.

Why don’t they just save up for it?

That is a valid financial point of view especially when you are talking about your wants in life. But when you start to factor in opportunity lost in starting with your business ideas now then that is another matter. You can save up for the capital you need for an idea you have now but what you are running up against on is time. You could already be earning now rather than later even if you are still repaying some borrowed money. Your ideas might not be relevant as well a few years down the line

Will people also help me in return?

They may and they may not help you when you set up your own crowdfunding campaign but you need to understand that when you invest in a project, you are mostly doing it for yourself and not them. You want to invest to earn money for yourself down the line and that goes to your long-term financial goals. Helping other projects also increase your online presence and adds to your credibility.

Will the money be used as advertised?

Ideally but there are still a few bogus projects that fall through the cracks. Apart from these, most crowdfunding campaigns are able to deliver. As an investor, you also need to conduct due diligence on your money and make sure that you are updated with the project and changes if any. As a project initiator, you need to keep your investors in the loop during and after the crowdfunding campaign.

How do I manage the risk involved?

You are able to manage risk when they fall within your comfort level. Before investing, you must have a clear understanding what your risk appetite is. You can adjust this as you go along so you can manage your risk level.

 

This article is written by the Crowdfunders Editorial Team. In Asia, Crowdfunders.Asia is a leading portal on providing news related to crowdfunding, start-up, property and business. It is operated by CoAssets.com. CoAssets is South East Asia’s first listed and largest real estate crowdfunding platform. If you have any Crowdfunding news or stories to share, please email [email protected]

 

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