Developing a business according to your interests is something that everyone wants. However, not everyone has the capital to develop the business they want. For this reason, there is a program called crowdfunding. This time, we will discuss crowdfunding itself. Crowdfunding is an option that is now increasingly in demand. From financing small businesses, to financing film releases that are billions. This is also a form of crowdsourcing and alternative finance that is starting to re-emerge and is widely used by people to help entrepreneurs and start-up SMEs. For more details about crowdfunding itself, you can learn about it through the article below.

Definition of Crowdfunding

Crowdfunding is a fundraising technique by involving many people. This crowdfunding technique has begun to be applied in the midst of the world of property investment. So far, we only know individual investments. But not with crowdfunding, the source of funds collected comes from several people. In other words, loans for funds and/or investment capital are fulfilled by means of joint ventures with other investors. More simply, crowdfunding is a form of funding for those who need funds for the development of their business, where the funding is collected from several people. This approach takes advantage of the collective efforts of a number of individuals online using a platform or social media crowdfunding as a tool to reach them. As previously explained, this is also a form of crowdsourcing and alternative finance that is starting to re-emerge and is widely used by people to help entrepreneurs and start-up SMEs.

How Crowdfunding Works

Crowdfunding has a pillar, namely the existence of a website or site to access and of course the owner of capital. The business or business you own will later be registered on a website and will later be displayed so that the lenders can invest their funds as well as help the development of the business you have. In order to be collected, usually the process will take several days, if the targeted funds are collected, the funds can be disbursed to the business owner's account. However, to further optimize it you can do 3 things below:
  1. Make a business proposal to be more attractive. So that people are interested in investing their funds in the proposal you submit, then you can prepare a business proposal that is interesting, interactive, and more informative in its submission. This is so that the information provided can be well received for those who want to invest their funds in your business or business. The information provided must also be complete such as the type of business, the management process, the marketing process to the main goals of the business being run. to present it can be through text, writing, images, or videos.
  2. Register with a crowdfunding platform. If the proposal made is good and sufficient, then you can look for a crowdfunding platform that is trusted and has official regulations so that all transaction processes are safer.
  3. Monitor the progress of the proposals submitted. After choosing a platform, upload the business proposal that has been made and after uploading it, you must continue to monitor the progress of the funding process. If there are questions asked by capital owners related to your business or business, you can give short, concise, and clear answers. This is so that capital owners are interested and confident to invest their capital in your business.

Benefits of Crowdfunding

In addition to easy access to a wider and larger network of funders, crowdfunding also has a number of benefits that you can feel such as:
  1. Wider reach. This platform makes it easier for them to find people who are interested in developing funds throughout the region, and crowdfunding can also make it easier to interact and share fundraising campaigns with each other.
  2. Opportunity to do business introduction. Crowdfunding allows you to introduce your business or fundraising campaign by providing information that highlights the business that is being built. For example, the attractiveness, offer, target market, to the value of the company. This is so that these prospective funders know more about the business and its development steps.
  3. Doing marketing. You can start marketing the fundraiser through various channels such as social media, email, and other marketing strategies. This is useful so that the fundraising you do through the platform can be full of faster time.
  4. Validation of the concept. Introducing the concept of your business or business is the best thing that needs to be done. Therefore, in order for potential funders to be interested in investing their capital in your business, you can take a more mature approach to believe them by developing the business you are running. Therefore, crowdfunding does have many benefits besides for business development for those who need funds, crowdfunding is also a solution for those who want to develop their funds through assistance provided to businesses and businesses that need these funds.

Purpose of Crowdfunding

The purpose of this creation is to help small and large business people to get funding regarding the business they run. This fundraising will involve many people. Usually, crowdfunding can also be done by conducting online fundraising, and relying mostly on the intrinsic trust of people who place relationships with friends, family, and others.

Types of Crowdfunding

After knowing what crowdfunding itself is, this time we will understand what types are included in crowdfunding itself. The types and benefits obtained from some of these types are:

Equity Crowdfunding (EQF)

Basically, the type with a reference to the equity aspect offers the same advantage between visitors and program owners. If the investment made involves stock products, then the profit is divided equally between the two. Because of this, equity crowdfunding is one of the most popular options.

Donation Crowdfunding (DCF)

As the name implies, this breed is voluntary. Social activities such as natural disaster relief or social service are programs that are often carried out using DCF such as the construction of schools, foundations, and other public facilities. In contrast to the benefits of crowdfunding based on equity and rewards, project capital through this type will have no rewards or compensation and profits provided.

Reward Crowdfunding (RCF)

Crowdfunding rewards are carried out to finance projects in the form of creative products such as the creation of applications and games. In contrast to the equal benefits of other types, this type of benefit can be obtained in the form of gifts of goods or services according to the creative project being carried out, and not in the form of money. In other words, investors will get reciprocity in the form of attractive goods from the funds they spend. Usually, before carrying out the reward-based crowdfunding process, the fundraiser will submit a proposal first.

Investment Crowdfunding (ICF)

Investment crowdfunding is a way of investing with a small amount of crowdfunding with other people. The benefit of this crowdfunding is stock rewards in projects or properties where you also invest capital.

Debt Crowdfunding

Debt based crowdfunding is a type of crowdfunding that is carried out to provide capital loans. Capital owners or donors will benefit from loan interest. The form of this type of crowdfunding is usually in the form of Peer To Peer Lending (P2P Lending) services.

Pros of Crowdfunding

There are several advantages that you can get when crowdfunding. These advantages are:
  1. The first advantage is the easy and short process. In general, crowdfunding is a fundraising system that is carried out online. So as long as you are connected to an internet connection, the process will be completed easily in a relatively short time.
  2. The second advantage is that it is legal and safe. The majority of crowdfunding sites or platforms that you can find in Indonesia are already operating under the supervision of the OJK (Financial Services Authority). In other words, all transactions of spending funds for crowdfunding purposes can be said to be legal and safe.

Disadvantages of Crowdfunding

The downside of crowdfunding itself is the All or Nothing Conclusion. If you decide to invest with this one technique, the choice you will face is All or Nothing. If the investment asset runs smoothly, then you will make a profit. On the other hand, if you experience problems you must also be ready to lose funds from your investments.

Crowdfunding Apps

In Indonesia, the type of crowdfunding that is commonly known to the public is donation based. It is one of the most popular types of fundraising. Donation-based crowdfunding usually only asks for a small donation of money from a large number of people to a project. There is a crowdfunding application that you can use for those who want to do this crowdfunding. Here are some safe and trusted sites in Indonesia to raise funds easily and conveniently.

Kolase.com

Kolase.com is the first safest crowdfunding site in Indonesia that presents a variety of campaign options for creative industry players, be it musicians, event activists, book writers, and other creative planners. The advantage of this platform is that it can be mutually beneficial between the two parties, namely campaigners and boosters, a term for supporters of creative planners who create campaigns. Some of the musicians who have carried out the campaign and succeeded are Tulus, Fourtwnty, Elephant Kind, Mocca, Dekat, and several other Indonesian musicians.

Akseleran

Akseleran is a P2P lending platform in Indonesia that connects SMEs who need loans to develop their businesses with a pool of lenders who have more funds to fund the loans. Akseleran provides access to capital to business actors with competitive interest rates and flexibility in loan tenors, payment models, and collateral participation. Akseleran also opens up alternative lending opportunities for the Indonesian people to obtain attractive returns and commensurate with the existing risks.

Kitabisa.com

Kitabisa.com is one of the platforms that is widely known by many people in Indonesia. Quoting from the kitabisa.com page itself, the website is a site that accommodates people to donate and raise funds. Kitabisa.com is a site that is a place for fundraisers for people who want to raise funds. Not only that, this site is also a channel for collecting funds for various other purposes such as education, health assistance, humanitarianism, and other projects. However, Kitabisa does not give investment promises to depositors. This means that Kitabisa is more focused on finding charitable and voluntary funds for humanitarian and educational purposes compared to other businesses. For this type of business capital, this site does not stand alone and collaborates with another crowdfunding institution called HIJAW owned by Ivan Nanto which is assisted by members from the Indonesian Young Entrepreneurs Association (HIPMI) and the Indonesian Chamber of Commerce and Industry (KADIN). Until now, this site has managed to have more than one million members throughout Indonesia and has distributed funds of more than IDR 450 billion in the form of various donations and zakat.

Ayopeduli.com

Ayopeduli.com is one of the sites from Indonesia that aims to bring together social problems and solution providers. Among them are social mobilizers, sponsors, and donors. This site will bring together social problems and solution providers (social mobilizers, sponsors, and donors). By joining Ayopeduli, it is hoped that it can solve social problems such as the economy, health, education, and others more effectively and efficiently. This one site only provides assistance for social problems such as disaster and flood relief, social services, mass circumcision, and so on. For this fundraising process, we can provide funds with the GoPay system and Bank BRI directly listed on the website in the donation menu.

GandengTangan

In 2015, GandengTangan was created to facilitate the financial needs of micro businesses. Gandengtangan is here to make it easier for micro business actors to get additional business capital. With technology, they want to realize changes for the future of microfinance in Indonesia. Based on connectivity, they want to connect funders to provide social impact for micro business change as a form of contribution generated. To realize the connection between financiers and micro businesses, they initiated GT-Trust as their partner to oversee the funding system to ensure that it is safe and transparent. To date, GandengTangan has distributed more than Rp 5.4 billion to more than 1,400 micro entrepreneurs throughout Indonesia. This site has more than 11 thousand members from all corners of Indonesia. After knowing what crowdfunding is, its benefits, types, and other things, you can also do all kinds of crowdfunding through various platforms available in Indonesia. In addition, you can also still find other information about crowdfunding through other media. This is the discussion from GICTrade regarding the explanation of crowdfounding. You can also find out other trivia information about trading, crypto, and other financials, such as "Bitcoin: Definition, How It Works, and Its Benefits" only in the GIC Journal. Also make sure you deepen your forex knowledge at GICTrade, via the scalping ebook, and also NFP live trading. Make sure to download GIC Mobile Apps on the Google Play Store or Apps Store, to maximize the profits from forex trading.