This project covers the
present situation of Crowdfunding in India. It exhibits an Indian viewpoint
with reference to how might crowdfunding be executed besides he donation model.
It differentiates the models executed outside India versus models inside India.
There are different models for crowdfunding which have been covered in the
paper. At last, there’s a study concerning what’s lies ahead in the future for
crowdfunding and an Indian point of view on the same.
is a technique for raising capital through the aggregate efforts of companions,
family, clients, and individual investors. This approach takes advantage of the
the collective efforts of a vast pool of people—principally online by means of
web-based social networking and crowdfunding platforms—and use their systems
for more prominent reach and exposure. It
is an exceptionally prominent idea in the developed nations, for example, the
US and the UK where in the web is utilized to raise reserves from individuals
over the globe for a reason, which is typically a new company. This is done by
means of different stages accessible over the web. Kickstarter and Indiegogo
are one of the numerous prevalent stages over the world
Benefits of CF :
There are various advantages to
crowdfunding over customary techniques. Here are only three of the major points
of interest, which we’ll cover in more noteworthy detail later in this guide:
– We get access to many accredited investors who can look at our campaign,
interact with us and share our campaign.
: During a CF campaign, we get to look
at our business from the top level – history, transactions, value proposition
– Online CF can help us centralize
and streamline the efforts. So instead of duplicating efforts (as in –
printing documents, collating binders, and manually updating) during an update
– everything can be presented in a much more better format which is accessible
and also leaves us with more time
for running the business.
Models in CrowdFunding :
We can use the acronym D.R.E.I.M to explain
the models in crowdfunding:
Donation Model :
This is one of the most obvious models
used in crowdfunding in India. This works on a basic rule where people
raise/donate money towards a good cause. The investor here puts his investments
without any expectations of monetary returns.
Reward Model :
This is the most basic model that comes
to people’s minds when they think about crowdfunding. The investor gets
something in return (for eg In kind) once he makes the investment on a project.
Equity Model :
In the equity model, the project’s
management team makes an offering of the shares of the profits to the investors.
This is very similar to buying shares from the market, only difference that the
shares here are of a private firm.
Interest Model :
This model is very similar to taking a loan from the bank.
Only difference, that here the loan is taken from the crowd and not from the
bank and the terms are on the loan takers rather than anyone elses.
Mixed Model :
As the name suggests, it is a mix of models. For example one
platform may make an offering wherein there could be a chance of a
is no uncertainty about the fast approaching boom of crowdfunding in the Indian
Market after all it is extremely proficient and removes the middle men,
monetarily. However, there is a requirement for genuine laws, directions and
regulations with respect to crowdfunding like the JOBS act in the US.
crowdfunding legalized framework won’t just draw attention of foreign investors
but will also allow emerging start-ups to use the opportunities. These
undertakings thus may enable the Indian economy to develop. The idea, however
far fetched, is completely achievable.