Crowdfunding
Crowdfunding is a way in which entrepreneurs raise funds for their businesses.
There are three types of crowdfunding. Firstly we have the one base on Equity share of the business. This means that the business owner gives a share of his business to the fundraisers. The second one is the reward crowdfunding; this allows the fundraisers to pre-purchase the products from the company they have invested in. Finally, there is a donation crowdfunding that focuses on lending money to start-ups. Within this crowdfunding, some sites are used by companies to raise funds for their businesses. As an investor, it is, vital to be very careful when funding an entrepreneur since most of them are not guaranteed to succeed. This paper will outline three opportunities that I would choose to fund using two crowdfunding sites. Also, this paper will outline why I choose these opportunities and why crowdfunding is good for entrepreneurs.
Major opportunities
Firstly, I would like to invest in a Gucci fashion company. If this company choose this Kickstarter campaign, I will take this as a huge opportunity to invest here. The of this site is that one will be given a chance to re-purchase the products. The reason I choose to invest in this company is because of its superior products. Currently, Gucci clothesline is selling over the world, and the business is picking very fast. The research shows that every product that is produced by this clothesline circulate very fast because it’s the fashion now linked to celebrities. This is a company that is giving hope to many investors, and it’s likely to be successful.
The other opportunity that I would like to focus on is the production of drones and AI-based products. When a share of the venture is used, it means that as an investor, I will get a share of the business. The best site for this opportunity is we funder. This will ensure that the investor receives equity of the company. In this case, I see this as an excellent opportunity to invest in AI products. Looking at the current trends, technology is changing the world. Everything is being done differently, and we expect more to change in the future. The AI has changed the system, and many people are looking toward purchasing items that make their work easier. From businesses, hospitals, government offices, and homes, people are using AI every day. Hotels are using robots to deliver products while cameras are used at homes and offices for security purposes. Therefore I believe that these products will be successful and it’s time to invest in them.
The third opportunity is investing in kitchen baking products for pre-purchase purposes. As it is, baking materials are essential at home, and people are always purchasing kitchen items. I choose to invest in this product since it has a high of growing, and from the look of things, the market is large. Currently, people have learned to bake from home, and most want that experience. With this pandemic, many have no choice to go out other than baking from home. Therefore, I see a big opportunity in investing in this product. From many videos that are recirculating in media, it is evident that people are now learning to bake from home, and these materials are needed.
The market potential, advantages, and competition of these opportunities
When investing in a product through crowdfunding, it is vital to consider the potential of the company or the products that you want to invest in. For instance, all the products that I choose to invest in have the market potential to grow. This means that the market now still open to them. One of the most significant impacts that are making these products to have a good market is technology. For the Gucci products, the products are selling very fast because the company has a good strategy of marketing using celebrities. The AI products have a huge market in both US and other parts of the world because they are making work more accessible. The baking kitchen products have a huge market gap, and I am sure they will do good in the market.
I regard its advantages, investing in such products will be of great importance to both the investor and the fundraisers because they will accrue enough profits, which will be enough to share equity amongst themselves. Pre-purchasing a product from Gucci company is a good thing because their products explain the Elegance in fashion. It is vital to understand that in any business, there is competition on the other side. For instance, Gucci products are likely to face competition from other fashion designers like Adidas and Versace. Having this in mind will help the entrepreneur to take measures that will reduce competition. For the home baking products, the competition will come from other organizations that have been there before. For the AI products, there is less competition because these are products replacing the traditional practices.
Reflection
When completing this assignment, I have understood various things that I had not come across. Surprisingly, many entrepreneurs can now start their businesses very quickly. Making a good comparison with how traditional start-up business plan looks like, there is a huge difference with the current events. For instance, in traditional, entrepreneurs had to seek loans from banks to run their businesses. This made it difficult for many to run the business because nobody knew the fate of the business. As of now, anyone can run the business through crowdfunding. This means that crowdfunding sites like Kickstarter have made it easier for people to start a business. Looking at the Kickstarter, the entrepreneur does not refund the money back but gives a reward to the investor through incentives or pre-purchase. This is a good thing because the entrepreneur does incur extra costs. From what I have learned, many people have been successful through crowdfunding.
Also, I have come across wefund. This is a site that ensures that the investors are guaranteed Equity share in the organization they invest in. Even if this might seem to be a big issue for some entrepreneurs, it is said to be a significant site that one should consider. It is easier to raise funds to business then share the equity with the investors for a while to your payback. I find this to be most convenient rather than taking a loan from the bank, and you’re almost sure if the business is going to work or not. I have found that the donor’s site is also used by the entrepreneurs to raise funds for their companies, but it does not work effectively. People want to invest where they see the value of money. Therefore, it has been that many people using this site do not raise enough funds compared to other types of crowdfunding.
In a nutshell, I find this discussion to be very relevant because it helps young entrepreneurs who want to expand their business. They are able to understand other ways that they can get funds to boost their start-ups. Crowdfunding was not very famous in the past, but it is now taking the lead. I have been surprised to see huge businesses that have made it through crowdfunding. This means that one doesn’t need too much money to run a business. Since crowdfunding seems to carry enough benefits, it is likely to give banks a huge competition. This form of funding is not only important to the entrepreneur but also the investor. I have learned that one is not given a limitation on how much you should invest. This means that the benefits are given depending on the amount you invested. Therefore, as an investor, it’s is vital to look at those companies and products you can invest in and get such benefits. With such great moves, it is expected that the economy will be better, and it will eliminate the dependency levels. Many entrepreneurs have shown great satisfaction in crowdfunding, and many are joining to use it.