Has Crowdfunding been discussed here?

  exdragon 08:05 19 Jan 2017
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Answered

Just out of curiosity, what do you think of Crowdfunding? For example, could I say that my grandfather's greenhouse has been destroyed in the gales, he's devastated, as it contained all the seedlings his recently deceased wife planted. Then could I sit back, watch the money roll in and then go off on a world cruise?

I hasten to add: my grandfather died over 50 years ago, he didn't have a greenhouse and of course I'm aware that anyone who contributes to personal appeals for money does so of their own free will.

Just wondered, that's all.

  Forum Editor 09:55 19 Jan 2017

Crowdfunding can be an excellent way to raise money for a worthy cause - be it money to take your business to the next level, money to develop that brilliant idea into a viable commercial concern, or money to enable someone to receive life-saving medical care.

There are many crowdfunding sites, some specialising in equity funding, where entrepreneurs offer shares in a new business to investors looking for the next big thing. Other sites are open to anyone who wants to run a fund-raising campaign, either for business purposes, or to finance life-saving medical treatment for someone.

Essentially, these sites are there to raise money by attracting people who wouldn't normally have heard of a business idea, or the need for a child to travel abroad for specialised surgery, for instance. The principle is that lots of relatively small donations or investments accumulate to provide you with the total you need, but of course it's not as easy as posting an appeal and sitting back while the money rolls in.

The first thing to remember is that the site concerned isn't there because its owners love helping people - they are in business to make money, and they'll charge you a commission on every donation you receive. It's not huge - typically around 5%, but it's worth knowing about before you start.

Secondly, you have to convince potential backers that you aren't just trying to get the money for that holiday of a lifetime you are planning. People aren't going to part with money unless they are convinced (by you) that your appeal is for a worthy cause. If you are raising money for a business venture you need to show that you have done your homework, and you'll have to offer a suitable reward - typically shares in the business.

It has become a very big market area, and there will be thousands of other appeals like yours - you need to stand out from the crowd if you are to stand a chance of success. Getting a newspaper to publicise your worthy cause is helpful, and many appeals for money for medical expenses have succeeded in this way.

  exdragon 10:42 19 Jan 2017
Answer

Better make it clear - I'm not going down this route! It came to mind following a TV interiew with an adult who wanted money for (non-life threatening) surgery as the NHS waiting list was too long. There have also been several appeals recently for money for funerals.

I always understood it was as FE described in his opening couple of paragraphs, but perhaps I'm just being cynical.

  wee eddie 12:46 19 Jan 2017

Crowd Funding has been going for years in the Theatrical World. Musicals are probably the most notable example and those that put up the money to stage them are known as "Angels".

The risks are high and the possibilities of losing your money, huge. However, if you have a success on your hands, the payback is commensurate with the risks.

  chub_tor 13:16 19 Jan 2017

I only found out about crowd funding the other day when I was alerted via Facebook that a friend of mine in Hawaii was in urgent need of heart surgery. I was glad to give my small contribution, even though I realised that some of it would be creamed off for the site. Between us we were able to raise most of the money so that the surgery could go ahead and I am glad to say that our friend is now out of hospital and recovering at home.

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