Through social media and various other platforms, you must have heard the

word ‘crowdfunding’. It is one of the emerging and innovative ideas which is

spreading with the help of internet. Also, it is not a new concept but has been
since ages as Chandas has been collected for various causes and festivals
since years.

A very good afternoon to everyone present here. Today I will be talking on

Crowdfunding.

So, what exactly is Crowdfunding? Crowdfunding refers to the practice of

raising money for an idea or a project from a large group of people using the
internet or social networking like Facebook or Twitter or by using some
crowdfunding-dedicated websites.

It helps to improve the presence of small businesses and startups in social

media and increases funding prospects.

There are different models of crowdfunding like debt based, equity-based,

cause-based, rewards based, software value token, donation based, litigation,
etc.

Mostly the equity-based model is practiced in crowdfunding.

Different types of campaigns or social work undertaken by people can be

crowdfunded but I’ll mainly be focusing on crowdfunding for small businesses
or startups in this presentation.

Now, coming to how the entire system works. Everything starts with an idea.
As soon as you get a fundable idea, you create a project on various
crowdfunding platforms available online and set a target. And that’s pretty
much it. When the project is created, you share it with your friends and family
who spread it further to a lot of people. The crowd then pledges cash in return
for some equity or reward. In this way you hit your target and turn your idea
into a reality!
Some of the major crowdfunding platforms in India include RangDe,
Wishberry, ImpactGuru, Milaap and many more as you can see on the screen.
These platforms have helped many ideas turn into realities.

Talking about benefits, Crowdfunding has a lot of benefits. With crowdfunding,

there is no formal banking system and hence no tedious procedure required. It
is efficient promotes innovation among people.

It helps in elevation and progress of small and medium scale industries.

With the help of crowdfunding, one can reach to thousands of people at once
while sitting at the comfort of their homes.

It is a way to give back to the society and help young innovators with their
ideas that could ultimately lead to the betterment of not only the society but
the nation as a whole.

Crowdfunding even bypasses caste or gender based discriminations and

anyone and everyone can contribute.

Along with the benefits, there are some concerns as well which need to be
taken care of. Crowdfunding is risky for the new small-scale investors and
entrepreneurs and hence they often fail in their novice ventures.

The reputation is damaged if there is a failure to meet goals and targets which
results in a public failure.

Intellectual Property (IP) protection can be an issue as creators who engage

in crowdfunding are required to release their product to the public in early
stages which exposes them to the risk of copy by larger competitors.

Since it is without a regulatory framework there is a fear of public misuse and

frauds can take place.

Also, there is lack of expertise as the ratio of a novice is high here.

Crowdfunding has helped a lot of people in India. You can see a few
examples on the screen.

First one being NavGurukul. Two students from IIT Delhi created NavGurukul
- that gives training in software and IT to students for free. They started a
fundraiser to establish centers and provide resources for good training. They
have raised close to Rs. 7 lacs through their crowdfunding efforts.

Second is Kohka Foundation from Madhya Pradesh, which has collected an

amount of Rs 5 lacs to buy computers for tribal students and improve their
lives.

So, in the end, I would like to conclude by saying that crowdfunding is one of
the best things that could happen to humanity. It helps people turn their ideas
into realities and contribute towards the nation’s development.