{"id":10281,"date":"2022-12-20T11:38:07","date_gmt":"2022-12-20T06:08:07","guid":{"rendered":"https:\/\/razorpay.com\/blog\/?p=10281"},"modified":"2023-02-28T11:45:56","modified_gmt":"2023-02-28T06:15:56","slug":"crowdfunding-what-is-it","status":"publish","type":"post","link":"https:\/\/razorpay.com\/blog\/business-banking\/crowdfunding-what-is-it\/","title":{"rendered":"Crowdfunding: What Is It and How Does It Work?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Crowdfunding has become a favourable and feasible medium of fundraising, helping businesses to roll out and sustain their ventures in the competitive market. Moreover, it is an ideal way by which fundraisers collect considerable amounts from large groups of individuals.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Generally, budding businesses or start-up companies consider this type of funding as a convenient means of accessing alternative funds and continuing with daily business activities without facing financial constraints.\u00a0<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d086c851893\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d086c851893\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/crowdfunding-what-is-it\/#What_is_Crowdfunding\" >What is Crowdfunding?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/crowdfunding-what-is-it\/#How_does_Crowdfunding_work\" >How does Crowdfunding work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/crowdfunding-what-is-it\/#Types_of_Crowdfunding\" >Types of Crowdfunding<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/crowdfunding-what-is-it\/#Advantages_of_Crowdfunding\" >Advantages of Crowdfunding<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/crowdfunding-what-is-it\/#Risks_of_Crowdfunding\" >Risks of Crowdfunding<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/crowdfunding-what-is-it\/#Crowdfunding_benefits_for_investors\" >Crowdfunding benefits for investors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/crowdfunding-what-is-it\/#Examples_of_successful_crowdfunding_campaigns\" >Examples of successful crowdfunding campaigns<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/crowdfunding-what-is-it\/#How_RazorpayX_Helps_Start-up_Companies\" >How RazorpayX Helps Start-up Companies?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/crowdfunding-what-is-it\/#Frequently_Asked_Questions\" >Frequently Asked Questions<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What_is_Crowdfunding\"><\/span><b>What is Crowdfunding?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<blockquote class=\"modern-quote\"><p><span style=\"font-weight: 400;\">In crowdfunding, several individuals come forward to donate smaller amounts towards meeting larger funding aims.<\/span><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\"> It is an effective way to raise money and gather the capital required to get a business off the ground. For businesses it is an ideal opportunity for entrepreneurs to source investors, helping them expand the horizon of their business.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It involves a wide network of people, connecting them typically through the internet and gathering funds to back up new business projects or ideas. It helps businesses not only acquire funds but also grow their audience pool.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_does_Crowdfunding_work\"><\/span><b>How does Crowdfunding work?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Crowdfunding brings lucrative opportunities for entrepreneurs to raise substantial funds from anyone willing to invest. In addition, this practice of funding creates a forum for those who want to pitch ideas to waiting investors. Investors can choose from hundreds of options and invest a meagre amount.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This type of funding leverages social networking sites to showcase its business needs and goals to potential investors and gather funds accordingly. Different crowdfunding platforms enable interactions between fundraisers and the crowd, helping businesses achieve their funding aim.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Types_of_Crowdfunding\"><\/span><b>Types of Crowdfunding<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Here are the types of crowdfunding that business bodies can opt for to raise money and accelerate cash flow:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>Peer-to-peer Lending<\/b><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">In peer-to-peer lending, companies borrow money from large groups of people (crowd), promising them to repay the amount with interest. This type of <a href=\"https:\/\/rbi.org.in\/scripts\/Bs_viewcontent.aspx?Id=3164\" rel=\"nofollow noopener\" target=\"_blank\">funding<\/a> is like traditional borrowing, except that the amount is borrowed from multiple investors.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>Rewards-based Crowdfunding<\/b><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">As the name suggests, in reward-based crowdfunding, a group of individuals contribute towards a project in return for receiving a non-financial reward like any services or goods.\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>Donation-based Crowdfunding<\/b><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">In donation-based crowdfunding, a large group of individuals contribute small portions towards materialising the funding aim of a charitable project. However, in this, investors do not receive any material or financial return.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Another convenient way business bodies can streamline their crowdfunding platforms is by opening current accounts. With the <\/span><a href=\"https:\/\/razorpay.com\/x\/current-accounts\/\"><span style=\"font-weight: 400;\">RazorpayX-powered<\/span><\/a><span style=\"font-weight: 400;\"> current account services, business bodies can replace tedious manual financial operations and save turnaround time.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Advantages_of_Crowdfunding\"><\/span><b>Advantages of Crowdfunding<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><b>Crowdfunding<\/b><span style=\"font-weight: 400;\"> comes with the following lucrative advantages:<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-10291 size-full\" src=\"https:\/\/d6xcmfyh68wv8.cloudfront.net\/blog-content\/uploads\/2022\/12\/Screenshot-2022-12-20-at-10.37.20-AM.png\" alt=\"crowdfunding\" width=\"1200\" height=\"1142\" srcset=\"https:\/\/blog.razorpay.in\/wp-content\/uploads\/2022\/12\/Screenshot-2022-12-20-at-10.37.20-AM.png 1200w, https:\/\/blog.razorpay.in\/wp-content\/uploads\/2022\/12\/Screenshot-2022-12-20-at-10.37.20-AM-300x286.png 300w, https:\/\/blog.razorpay.in\/wp-content\/uploads\/2022\/12\/Screenshot-2022-12-20-at-10.37.20-AM-1024x975.png 1024w, https:\/\/blog.razorpay.in\/wp-content\/uploads\/2022\/12\/Screenshot-2022-12-20-at-10.37.20-AM-768x731.png 768w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">It helps small businesses resolve all payments and stay afloat even during the lean period. It also helps investors explore different business options.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Risks_of_Crowdfunding\"><\/span><b>Risks of Crowdfunding<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Both investors and business firms must be aware of the risks related to this type of funding. Albeit companies or firms can effectively raise funds via funding, they cannot dodge the risks associated with this financing method. For it to prove effective, business owners must invest in crowdfunding campaigns.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the case of Investors, indulging in it can rob them of their entire investment. Moreover, in case a startup fails to sustain itself, the investors will end up losing a lump sum amount. Hence, they must ensure that they are contributing to a credible company, thereby making an informed decision.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Crowdfunding_benefits_for_investors\"><\/span><strong>Crowdfunding benefits for investors<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Here are a few crowdfunding benefits for investors. Let&#8217;s have a look.<\/p>\n<p><span data-offset-key=\"bac9o-8-0\">1<\/span><span data-offset-key=\"bac9o-9-0\">.<\/span><strong> Access to Early Stage Deals:<\/strong><span data-offset-key=\"bac9o-16-0\"> Crowd<\/span><span data-offset-key=\"bac9o-17-0\">funding<\/span><span data-offset-key=\"bac9o-18-0\"> offers<\/span><span data-offset-key=\"bac9o-19-0\"> investors<\/span><span data-offset-key=\"bac9o-20-0\"> the<\/span><span data-offset-key=\"bac9o-21-0\"> opportunity<\/span><span data-offset-key=\"bac9o-22-0\"> to<\/span><span data-offset-key=\"bac9o-23-0\"> invest<\/span><span data-offset-key=\"bac9o-24-0\"> in<\/span><span data-offset-key=\"bac9o-25-0\"> high<\/span><span data-offset-key=\"bac9o-26-0\">&#8211;<\/span><span data-offset-key=\"bac9o-27-0\">growth<\/span><span data-offset-key=\"bac9o-28-0\"> startups<\/span><span data-offset-key=\"bac9o-29-0\"> and<\/span><span data-offset-key=\"bac9o-30-0\"> businesses<\/span><span data-offset-key=\"bac9o-31-0\"> at<\/span><span data-offset-key=\"bac9o-32-0\"> an<\/span><span data-offset-key=\"bac9o-33-0\"> earlier<\/span><span data-offset-key=\"bac9o-34-0\"> stage<\/span><span data-offset-key=\"bac9o-35-0\"> of<\/span><span data-offset-key=\"bac9o-36-0\"> development<\/span><span data-offset-key=\"bac9o-37-0\"> than<\/span><span data-offset-key=\"bac9o-38-0\"> they<\/span><span data-offset-key=\"bac9o-39-0\"> would<\/span><span data-offset-key=\"bac9o-40-0\"> otherwise<\/span><span data-offset-key=\"bac9o-41-0\"> have<\/span><span data-offset-key=\"bac9o-42-0\"> access<\/span><span data-offset-key=\"bac9o-43-0\"> to<\/span><span data-offset-key=\"bac9o-44-0\">.<\/span><span data-offset-key=\"bac9o-45-0\"> This<\/span><span data-offset-key=\"bac9o-46-0\"> can<\/span><span data-offset-key=\"bac9o-47-0\"> provide<\/span><span data-offset-key=\"bac9o-48-0\"> investors<\/span><span data-offset-key=\"bac9o-49-0\"> with<\/span><span data-offset-key=\"bac9o-50-0\"> greater<\/span><span data-offset-key=\"bac9o-51-0\"> potential<\/span><span data-offset-key=\"bac9o-52-0\"> returns<\/span><span data-offset-key=\"bac9o-53-0\">,<\/span><span data-offset-key=\"bac9o-54-0\"> as<\/span><span data-offset-key=\"bac9o-55-0\"> well<\/span><span data-offset-key=\"bac9o-56-0\"> as<\/span><span data-offset-key=\"bac9o-57-0\"> the<\/span><span data-offset-key=\"bac9o-58-0\"> chance<\/span><span data-offset-key=\"bac9o-59-0\"> to<\/span><span data-offset-key=\"bac9o-60-0\"> be<\/span><span data-offset-key=\"bac9o-61-0\"> part<\/span><span data-offset-key=\"bac9o-62-0\"> of<\/span><span data-offset-key=\"bac9o-63-0\"> a<\/span><span data-offset-key=\"bac9o-64-0\"> project<\/span><span data-offset-key=\"bac9o-65-0\">\u2019<\/span><span data-offset-key=\"bac9o-66-0\">s<\/span><span data-offset-key=\"bac9o-67-0\"> growth<\/span><span data-offset-key=\"bac9o-68-0\"> and<\/span><span data-offset-key=\"bac9o-69-0\"> success<\/span><span data-offset-key=\"bac9o-70-0\">.<\/span><\/p>\n<p><span data-offset-key=\"bac9o-73-0\">2<\/span><span data-offset-key=\"bac9o-74-0\">.<\/span><strong> Diversification:<\/strong><span data-offset-key=\"bac9o-79-0\"> With<\/span><span data-offset-key=\"bac9o-80-0\"> crowdfunding<\/span><span data-offset-key=\"bac9o-81-0\">,<\/span><span data-offset-key=\"bac9o-82-0\"> investors<\/span><span data-offset-key=\"bac9o-83-0\"> can<\/span><span data-offset-key=\"bac9o-84-0\"> divers<\/span><span data-offset-key=\"bac9o-85-0\">ify<\/span><span data-offset-key=\"bac9o-86-0\"> their<\/span><span data-offset-key=\"bac9o-87-0\"> portfolios<\/span><span data-offset-key=\"bac9o-88-0\"> by<\/span><span data-offset-key=\"bac9o-89-0\"> investing<\/span><span data-offset-key=\"bac9o-90-0\"> in<\/span><span data-offset-key=\"bac9o-91-0\"> a<\/span><span data-offset-key=\"bac9o-92-0\"> variety<\/span><span data-offset-key=\"bac9o-93-0\"> of<\/span><span data-offset-key=\"bac9o-94-0\"> deals<\/span><span data-offset-key=\"bac9o-95-0\">.<\/span><span data-offset-key=\"bac9o-96-0\"> This<\/span><span data-offset-key=\"bac9o-97-0\"> provides<\/span><span data-offset-key=\"bac9o-98-0\"> investors<\/span><span data-offset-key=\"bac9o-99-0\"> with<\/span><span data-offset-key=\"bac9o-100-0\"> the<\/span><span data-offset-key=\"bac9o-101-0\"> chance<\/span><span data-offset-key=\"bac9o-102-0\"> to<\/span><span data-offset-key=\"bac9o-103-0\"> spread<\/span><span data-offset-key=\"bac9o-104-0\"> their<\/span><span data-offset-key=\"bac9o-105-0\"> risk<\/span><span data-offset-key=\"bac9o-106-0\"> across<\/span><span data-offset-key=\"bac9o-107-0\"> multiple<\/span><span data-offset-key=\"bac9o-108-0\"> investments<\/span><span data-offset-key=\"bac9o-109-0\">,<\/span><span data-offset-key=\"bac9o-110-0\"> thus<\/span><span data-offset-key=\"bac9o-111-0\"> reducing<\/span><span data-offset-key=\"bac9o-112-0\"> their<\/span><span data-offset-key=\"bac9o-113-0\"> overall<\/span><span data-offset-key=\"bac9o-114-0\"> exposure<\/span><span data-offset-key=\"bac9o-115-0\"> to<\/span><span data-offset-key=\"bac9o-116-0\"> any<\/span><span data-offset-key=\"bac9o-117-0\"> one<\/span><span data-offset-key=\"bac9o-118-0\"> deal<\/span><span data-offset-key=\"bac9o-119-0\">.<\/span><\/p>\n<p><span data-offset-key=\"bac9o-122-0\">3<\/span><span data-offset-key=\"bac9o-123-0\">.<\/span><strong> Lower Investment Minimums:<\/strong><span data-offset-key=\"bac9o-129-0\"> Crowd<\/span><span data-offset-key=\"bac9o-130-0\">funding<\/span><span data-offset-key=\"bac9o-131-0\"> platforms<\/span><span data-offset-key=\"bac9o-132-0\"> often<\/span><span data-offset-key=\"bac9o-133-0\"> offer<\/span><span data-offset-key=\"bac9o-134-0\"> lower<\/span><span data-offset-key=\"bac9o-135-0\"> investment<\/span><span data-offset-key=\"bac9o-136-0\"> minimum<\/span><span data-offset-key=\"bac9o-137-0\">s<\/span><span data-offset-key=\"bac9o-138-0\"> than<\/span><span data-offset-key=\"bac9o-139-0\"> traditional<\/span><span data-offset-key=\"bac9o-140-0\"> investment<\/span><span data-offset-key=\"bac9o-141-0\"> channels<\/span><span data-offset-key=\"bac9o-142-0\">,<\/span><span data-offset-key=\"bac9o-143-0\"> allowing<\/span><span data-offset-key=\"bac9o-144-0\"> investors<\/span><span data-offset-key=\"bac9o-145-0\"> to<\/span><span data-offset-key=\"bac9o-146-0\"> access<\/span><span data-offset-key=\"bac9o-147-0\"> more<\/span><span data-offset-key=\"bac9o-148-0\"> deals<\/span><span data-offset-key=\"bac9o-149-0\"> with<\/span><span data-offset-key=\"bac9o-150-0\"> lower<\/span><span data-offset-key=\"bac9o-151-0\"> amounts<\/span><span data-offset-key=\"bac9o-152-0\"> of<\/span><span data-offset-key=\"bac9o-153-0\"> capital<\/span><span data-offset-key=\"bac9o-154-0\">.<\/span><\/p>\n<p><span data-offset-key=\"bac9o-157-0\">4<\/span><span data-offset-key=\"bac9o-158-0\">.<\/span><strong> Lower Fees:<\/strong><span data-offset-key=\"bac9o-162-0\"> Crowd<\/span><span data-offset-key=\"bac9o-163-0\">funding<\/span><span data-offset-key=\"bac9o-164-0\"> platforms<\/span><span data-offset-key=\"bac9o-165-0\"> often<\/span><span data-offset-key=\"bac9o-166-0\"> offer<\/span><span data-offset-key=\"bac9o-167-0\"> lower<\/span><span data-offset-key=\"bac9o-168-0\"> fees<\/span><span data-offset-key=\"bac9o-169-0\"> than<\/span><span data-offset-key=\"bac9o-170-0\"> traditional<\/span><span data-offset-key=\"bac9o-171-0\"> investment<\/span><span data-offset-key=\"bac9o-172-0\"> channels<\/span><span data-offset-key=\"bac9o-173-0\">,<\/span><span data-offset-key=\"bac9o-174-0\"> allowing<\/span><span data-offset-key=\"bac9o-175-0\"> investors<\/span><span data-offset-key=\"bac9o-176-0\"> to<\/span><span data-offset-key=\"bac9o-177-0\"> keep<\/span><span data-offset-key=\"bac9o-178-0\"> more<\/span><span data-offset-key=\"bac9o-179-0\"> of<\/span><span data-offset-key=\"bac9o-180-0\"> their<\/span><span data-offset-key=\"bac9o-181-0\"> returns<\/span><span data-offset-key=\"bac9o-182-0\">.<\/span><\/p>\n<p><span data-offset-key=\"bac9o-185-0\">5<\/span><span data-offset-key=\"bac9o-186-0\">.<\/span><strong> Increased Liquidity:<\/strong><span data-offset-key=\"bac9o-191-0\"> Crowd<\/span><span data-offset-key=\"bac9o-192-0\">funding<\/span><span data-offset-key=\"bac9o-193-0\"> platforms<\/span><span data-offset-key=\"bac9o-194-0\"> often<\/span><span data-offset-key=\"bac9o-195-0\"> offer<\/span><span data-offset-key=\"bac9o-196-0\"> greater<\/span><span data-offset-key=\"bac9o-197-0\"> liquidity<\/span><span data-offset-key=\"bac9o-198-0\"> than<\/span><span data-offset-key=\"bac9o-199-0\"> traditional<\/span><span data-offset-key=\"bac9o-200-0\"> investment<\/span><span data-offset-key=\"bac9o-201-0\"> channels<\/span><span data-offset-key=\"bac9o-202-0\">,<\/span><span data-offset-key=\"bac9o-203-0\"> allowing<\/span><span data-offset-key=\"bac9o-204-0\"> investors<\/span><span data-offset-key=\"bac9o-205-0\"> to<\/span><span data-offset-key=\"bac9o-206-0\"> exit<\/span><span data-offset-key=\"bac9o-207-0\"> their<\/span><span data-offset-key=\"bac9o-208-0\"> investments<\/span><span data-offset-key=\"bac9o-209-0\"> more<\/span><span data-offset-key=\"bac9o-210-0\"> quickly<\/span><span data-offset-key=\"bac9o-211-0\">.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Examples_of_successful_crowdfunding_campaigns\"><\/span><strong>Examples of successful crowdfunding campaigns<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Let&#8217;s have a look at successful crowdfunding campaigns.<\/p>\n<p><span data-offset-key=\"aisp-7-0\">1<\/span><span data-offset-key=\"aisp-8-0\">.<\/span><strong> Pebble Smartwatch<\/strong><span data-offset-key=\"aisp-12-0\"> &#8211;<\/span><span data-offset-key=\"aisp-13-0\"> This<\/span><span data-offset-key=\"aisp-14-0\"> campaign<\/span><span data-offset-key=\"aisp-15-0\"> set<\/span><span data-offset-key=\"aisp-16-0\"> the<\/span><span data-offset-key=\"aisp-17-0\"> world<\/span><span data-offset-key=\"aisp-18-0\"> record<\/span><span data-offset-key=\"aisp-19-0\"> for<\/span><span data-offset-key=\"aisp-20-0\"> the<\/span><span data-offset-key=\"aisp-21-0\"> most<\/span><span data-offset-key=\"aisp-22-0\"> money<\/span><span data-offset-key=\"aisp-23-0\"> raised<\/span><span data-offset-key=\"aisp-24-0\"> through<\/span><span data-offset-key=\"aisp-25-0\"> crowdfunding<\/span><span data-offset-key=\"aisp-26-0\">,<\/span><span data-offset-key=\"aisp-27-0\"> raising<\/span><span data-offset-key=\"aisp-28-0\"> more<\/span><span data-offset-key=\"aisp-29-0\"> than<\/span><span data-offset-key=\"aisp-30-0\"> $<\/span><span data-offset-key=\"aisp-31-0\">10<\/span><span data-offset-key=\"aisp-32-0\"> million<\/span><span data-offset-key=\"aisp-33-0\"> on<\/span><span data-offset-key=\"aisp-34-0\"> Kickstarter<\/span><span data-offset-key=\"aisp-35-0\">.<\/span><\/p>\n<p><span data-offset-key=\"aisp-38-0\">2<\/span><span data-offset-key=\"aisp-39-0\">.<\/span><strong> Exploding Kittens<\/strong><span data-offset-key=\"aisp-44-0\"> &#8211;<\/span><span data-offset-key=\"aisp-45-0\"> This<\/span><span data-offset-key=\"aisp-46-0\"> card<\/span><span data-offset-key=\"aisp-47-0\"> game<\/span><span data-offset-key=\"aisp-48-0\"> raised<\/span><span data-offset-key=\"aisp-49-0\"> over<\/span><span data-offset-key=\"aisp-50-0\"> $<\/span><span data-offset-key=\"aisp-51-0\">8<\/span><span data-offset-key=\"aisp-52-0\">.<\/span><span data-offset-key=\"aisp-53-0\">7<\/span><span data-offset-key=\"aisp-54-0\"> million<\/span><span data-offset-key=\"aisp-55-0\"> on<\/span><span data-offset-key=\"aisp-56-0\"> Kickstarter<\/span><span data-offset-key=\"aisp-57-0\">,<\/span><span data-offset-key=\"aisp-58-0\"> becoming<\/span><span data-offset-key=\"aisp-59-0\"> the<\/span><span data-offset-key=\"aisp-60-0\"> most<\/span><span data-offset-key=\"aisp-61-0\">&#8211;<\/span><span data-offset-key=\"aisp-62-0\">funded<\/span><span data-offset-key=\"aisp-63-0\"> game<\/span><span data-offset-key=\"aisp-64-0\"> in<\/span><span data-offset-key=\"aisp-65-0\"> the<\/span><span data-offset-key=\"aisp-66-0\"> website<\/span><span data-offset-key=\"aisp-67-0\">&#8216;s<\/span><span data-offset-key=\"aisp-68-0\"> history<\/span><span data-offset-key=\"aisp-69-0\">.<\/span><\/p>\n<p><span data-offset-key=\"aisp-72-0\">3<\/span><span data-offset-key=\"aisp-73-0\">.<\/span><strong> Coolest Cooler<\/strong><span data-offset-key=\"aisp-78-0\"> &#8211;<\/span><span data-offset-key=\"aisp-79-0\"> This<\/span><span data-offset-key=\"aisp-80-0\"> cooler<\/span><span data-offset-key=\"aisp-81-0\"> with<\/span><span data-offset-key=\"aisp-82-0\"> a<\/span><span data-offset-key=\"aisp-83-0\"> built<\/span><span data-offset-key=\"aisp-84-0\">&#8211;<\/span><span data-offset-key=\"aisp-85-0\">in<\/span><span data-offset-key=\"aisp-86-0\"> blender<\/span><span data-offset-key=\"aisp-87-0\">,<\/span><span data-offset-key=\"aisp-88-0\"> Bluetooth<\/span><span data-offset-key=\"aisp-89-0\"> speaker<\/span><span data-offset-key=\"aisp-90-0\">,<\/span><span data-offset-key=\"aisp-91-0\"> USB<\/span><span data-offset-key=\"aisp-92-0\"> charger<\/span><span data-offset-key=\"aisp-93-0\"> and<\/span><span data-offset-key=\"aisp-94-0\"> a<\/span><span data-offset-key=\"aisp-95-0\"> cutting<\/span><span data-offset-key=\"aisp-96-0\"> board<\/span><span data-offset-key=\"aisp-97-0\"> raised<\/span><span data-offset-key=\"aisp-98-0\"> over<\/span><span data-offset-key=\"aisp-99-0\"> $<\/span><span data-offset-key=\"aisp-100-0\">13<\/span><span data-offset-key=\"aisp-101-0\"> million<\/span><span data-offset-key=\"aisp-102-0\"> on<\/span><span data-offset-key=\"aisp-103-0\"> Kickstarter<\/span><span data-offset-key=\"aisp-104-0\">.<\/span><\/p>\n<p><span data-offset-key=\"aisp-107-0\">4<\/span><span data-offset-key=\"aisp-108-0\">.<\/span><strong> Reading Rainbow<\/strong><span data-offset-key=\"aisp-111-0\"> &#8211;<\/span><span data-offset-key=\"aisp-112-0\"> This<\/span><span data-offset-key=\"aisp-113-0\"> educational<\/span><span data-offset-key=\"aisp-114-0\"> children<\/span><span data-offset-key=\"aisp-115-0\">&#8216;s<\/span><span data-offset-key=\"aisp-116-0\"> show<\/span><span data-offset-key=\"aisp-117-0\"> raised<\/span><span data-offset-key=\"aisp-118-0\"> more<\/span><span data-offset-key=\"aisp-119-0\"> than<\/span><span data-offset-key=\"aisp-120-0\"> $<\/span><span data-offset-key=\"aisp-121-0\">5<\/span><span data-offset-key=\"aisp-122-0\"> million<\/span><span data-offset-key=\"aisp-123-0\"> on<\/span><span data-offset-key=\"aisp-124-0\"> Kickstarter<\/span><span data-offset-key=\"aisp-125-0\">,<\/span><span data-offset-key=\"aisp-126-0\"> making<\/span><span data-offset-key=\"aisp-127-0\"> it<\/span><span data-offset-key=\"aisp-128-0\"> the<\/span><span data-offset-key=\"aisp-129-0\"> most<\/span><span data-offset-key=\"aisp-130-0\"> funded<\/span><span data-offset-key=\"aisp-131-0\"> educational<\/span><span data-offset-key=\"aisp-132-0\"> project<\/span><span data-offset-key=\"aisp-133-0\"> in<\/span><span data-offset-key=\"aisp-134-0\"> the<\/span><span data-offset-key=\"aisp-135-0\"> website<\/span><span data-offset-key=\"aisp-136-0\">&#8216;s<\/span><span data-offset-key=\"aisp-137-0\"> history<\/span><span data-offset-key=\"aisp-138-0\">.<\/span><\/p>\n<p><span data-offset-key=\"aisp-141-0\">5<\/span><span data-offset-key=\"aisp-142-0\">.<\/span><strong> OUYA<\/strong><span data-offset-key=\"aisp-145-0\"> &#8211;<\/span><span data-offset-key=\"aisp-146-0\"> This<\/span><span data-offset-key=\"aisp-147-0\"> video<\/span><span data-offset-key=\"aisp-148-0\"> game<\/span><span data-offset-key=\"aisp-149-0\"> console<\/span><span data-offset-key=\"aisp-150-0\"> raised<\/span><span data-offset-key=\"aisp-151-0\"> over<\/span><span data-offset-key=\"aisp-152-0\"> $<\/span><span data-offset-key=\"aisp-153-0\">8<\/span><span data-offset-key=\"aisp-154-0\">.<\/span><span data-offset-key=\"aisp-155-0\">6<\/span><span data-offset-key=\"aisp-156-0\"> million<\/span><span data-offset-key=\"aisp-157-0\"> on<\/span><span data-offset-key=\"aisp-158-0\"> Kickstarter<\/span><span data-offset-key=\"aisp-159-0\"> and<\/span><span data-offset-key=\"aisp-160-0\"> became<\/span><span data-offset-key=\"aisp-161-0\"> the<\/span><span data-offset-key=\"aisp-162-0\"> third<\/span><span data-offset-key=\"aisp-163-0\"> most-funded<\/span><span data-offset-key=\"aisp-165-0\">\u00a0project<\/span><span data-offset-key=\"aisp-166-0\"> in<\/span><span data-offset-key=\"aisp-167-0\"> the<\/span><span data-offset-key=\"aisp-168-0\"> website<\/span><span data-offset-key=\"aisp-169-0\">&#8216;s<\/span><span data-offset-key=\"aisp-170-0\"> history<\/span><span data-offset-key=\"aisp-171-0\">.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_RazorpayX_Helps_Start-up_Companies\"><\/span><b>How RazorpayX Helps Start-up Companies?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Besides opting for crowdfunding, budding businesses can unlock multiple benefits that banking solution providers like RazorpayX extend to their customers. They help businesses manage their growth and sustain themselves in an ambiguous global scenario.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Budding business enterprises can opt for RazorpayX for the following reasons:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">One-stop banking solutions platforms like<\/span><a href=\"https:\/\/razorpay.com\/x\/current-accounts\/\"> <span style=\"font-weight: 400;\">RazorpayX<\/span><\/a><span style=\"font-weight: 400;\"> allows business owners to open<\/span><a href=\"https:\/\/razorpay.com\/x\/current-accounts\/?utm_source=direct&amp;utm_medium=website\"> <span style=\"font-weight: 400;\">current accounts<\/span><\/a><span style=\"font-weight: 400;\">,<\/span><a href=\"https:\/\/razorpay.com\/x\/tax-payments\/\"> <span style=\"font-weight: 400;\">pay taxes<\/span><\/a><span style=\"font-weight: 400;\">, schedule payments,<\/span><a href=\"https:\/\/razorpay.com\/x\/vendor-payments\/\"> <span style=\"font-weight: 400;\">pay vendors<\/span><\/a><span style=\"font-weight: 400;\"> seamlessly and check invoices from a single dashboard. This saves valuable time and effort.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It is an accounting and banking platform that fills the gap between advanced banking solutions and finance professionals. It allows <em>easy accounting software integration<\/em>.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">With<\/span><a href=\"https:\/\/razorpay.com\/payroll\/\"> <span style=\"font-weight: 400;\">RazorpayX Payroll<\/span><\/a><span style=\"font-weight: 400;\">, businesses can <em>automate salary payments<\/em> and provide insurance policies to their employees.<\/span><\/li>\n<\/ul>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/x\/?r=blog_cta_business_banking_crowdfunding&amp;utm_source=blog&amp;utm_medium=cta\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Join RazorpayX!<\/a><\/div>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">This type of funding is a debt-free way for entrepreneurs or startup companies to raise funds and expedite the cash flow beyond the conventional method of doing so. The one-stop banking solutions platform <\/span><a href=\"https:\/\/razorpay.com\/\"><span style=\"font-weight: 400;\">RazorpayX<\/span><\/a><span style=\"font-weight: 400;\"> helps business bodies in manifold ways, which include paying taxes, checking invoices, opening current accounts etc.<\/span><\/p>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/x.razorpay.com\/auth\/signup\/?r=blog_cta_business_banking_online_banking&amp;utm_source=blog&amp;utm_medium=cta\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Explore RazorpayX-powered Current Account<\/a><\/div>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions\"><\/span>Frequently Asked Questions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div id=\"rank-math-rich-snippet-wrapper\"><div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-1\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \">What tips must investors follow before investing in crowdfunding?<\/h3>\n<div class=\"rank-math-answer \">\n\n<p>It is important for investors to see the goal of a specific project or a company and research the founders and team history. Next, investors must identify the unique value proposition (UVP), and finally, they must scrutinise the authenticity of the company by checking its official website. <\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-2\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \">What is equity crowdfunding?<\/h3>\n<div class=\"rank-math-answer \">\n\n<p>In equity crowdfunding, businesses sell a portion of the stake or company securities to groups of potential investors in exchange for financing, wherein each investor is entitled to the company's stake. However, equity-based crowdfunding is considered illegal by SEBI (Securities and Exchange Board of India). <\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-3\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \">What are the challenges that new businesses face with crowdfunding?<\/h3>\n<div class=\"rank-math-answer \">\n\n<p>The biggest hindrance for new businesses is to face trust issues; as they have no prior record, investors do not find the business bodies credible enough to invest on. Even failure to choose the right crowdfunding platform and to generate interest are other challenges.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-4\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \">Is online crowdfunding legal in India?<\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Yes, online crowdfunding is legal in India. So, it is possible to raise funds via online sources like social media platforms for start-up companies and businesses in India.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-5\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \">Does crowdfunding prove effective in paying off business debts?<\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Business bodies have found crowdfunding to be one of the most effective ways to tackle business debts and help them tide over financial barriers. <\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Crowdfunding has become a favourable and feasible medium of fundraising, helping businesses to roll out and sustain their ventures in the competitive market. Moreover, it is an ideal way by which fundraisers collect considerable amounts from large groups of individuals.\u00a0 Generally, budding businesses or start-up companies consider this type of funding as a convenient means<\/p>\n","protected":false},"author":102,"featured_media":10299,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[27],"tags":[382],"class_list":{"0":"post-10281","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business-banking","8":"tag-crowdfunding"},"_links":{"self":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/10281","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/users\/102"}],"replies":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/comments?post=10281"}],"version-history":[{"count":0,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/10281\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media\/10299"}],"wp:attachment":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media?parent=10281"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/categories?post=10281"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/tags?post=10281"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}