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Crowdfunding and its rapid rise

posted Jul 17, 2014, 10:13 PM by Siamak Ebarhimi

Crowdfunding isn’t new on the scene by any means, says Alex Bell. But it is an investment method that more and more people are becoming aware of.

As highlighted in a feature in this week’s Greater Manchester Business Week magazine – celebrities such as Andy Murray and One Direction’s Louis Tomlinson have propelled it further into our psyches.

Murray talked about crowdfunding on the eve of attempting to defend his Wimbledon title and Tomlinson launched a £2m crowdfunding bid immediately after announcing his joint purchase of Doncaster Rovers Football Club.crowdfunding marketing

https://sites.google.com/site/crowdfundingsmadeeasy/about-us

But what is crowdfunding? Its definition – well, quite appropriately, its online definition – is ‘the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the internet’.

Or in other words – set a fundraising target for a business to hit; let people know about it online; hope people invest; go and spend the funds raised on bettering your business; and give some back to the investors who backed you if it works out.

Like any form of investing, there are risks – with some economists saying crowdfunding is among the riskiest of all, due to the fact you are giving small businesses, who aren’t likely to make the grade, your money.crowdfunding advertising

But spreading your investments, if you want to and can afford to, is apparently, a safer way to go using this method.

I spoke with two 30 year old lads, Matt Tomkin and Phil Hinchliffe, at the Bolton base of VO2. The pair are behind a sportswear brand – triathlon kit and equipment to be precise – and need £50,000 so they can get more stock in, then push the brand out to market.

They are confident that if they get it, they can be selling more than £2m worth of goods by the end of year three. Tomkin and Hinchliffe now have a nervous wait to see if they hit that mark.

With 35 investors so far backing them via crowdcube.com they need another £40,000ish soon.indiegogo marketing

And VO2 is not alone. Hundreds of start-ups and more established small businesses are using crowdfunding to get the funds they feel they need to progress.

Personally I think it is a brilliant and transparent way for investors and entrepreneurs to work together.

Through the better crowdfunding sites you can view a firm’s business plan, a promotional video and request a meeting with the founders.

From there it is all up to you. You decide how much you want to invest and do it online. But the money isn’t taken until the fundraising target is hit.

And even when the target is passed, you still get an option of either going ahead with your investment or not.

Well that’s how it works on Crowdcube anyway.kickstarter marketing

Crowdfunding links people together, and generates a flow of ideas from investors who join up with businesses.

Going to the bank to lend probably isn’t as easy as it once was. So why not get involved.

Andy Murray, one of Britain’s wealthiest sportsmen, is a certainly a fan. Although him mentioning crowdfunding pre-Wimbledon was unexpected, I’m not surprised that the concept interests him.

So let’s just hope that our Greater Manchester businesses and investors are taking full advantage of any good opportunities that crowdfunding may present because it has become an investment method that people aren’t just talking about.

Entrepreneurs and investors are putting their money where their mouths are.kickstarter project

Posted from: http://www.manchestereveningnews.co.uk/business/crowdfunding-isnt-just-growing-manchester-7439096

By David Khorram www.CrowdFundingPlanning.com