Growth

Rewards-based crowdfunding

Rewards-based crowdfunding

Description

Rewards-based crowdfunding consists of individuals donating to a project or business with the expectation of receiving a non-financial reward in return, such as goods or services at a later stage. A common example is a project or business offering a unique service (rewards) or a new product (pre-selling) in return for investment. This form of crowdfunding  allows companies to launch with orders already on the books and cash-flow secured (a major issue for new businesses) and gathers an audience before a product launch.

Key features

  • Funds given don't have to be repaid; you just deliver the service or the goods promised.
  • Orders are secured before the launch of a new product, and the crowdfunding campaign allows you to build your customer base as you raise funds.
  • You are obliged to deliver on your promises on schedule.
  • It is a popular option for startups and entrepreneurs as it provides a way to fund the launch of new companies or products.
  • It is particularly suitable for products and services that either are innovative or garner high levels of consumer attention.
  • Complicated concepts or products are less suitable for rewards crowdfunding.

Is it for me?

Equity crowdfunding Rewards-based crowdfunding Peer-to-peer lending
Pre-trading
Pre-profit
Profitable growing business
Established and steadily growing
Established stable business
Launching new product/service/brand
Making acquisitions
Expanding into new territories
Investing in new facilities
Looking to refinance
In need of capital restructuring

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