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Crowdfunding is a means of raising finance from a large number of people (the 'crowd') who are prepared to invest in your business or project. You can generally use crowdfunding to raise sums of between €20,000 and €200,000. Crowdfunding is becoming quite popular in the Netherlands and several platforms exist for this purpose.
Types of crowdfunding
Several types of crowdfunding exist:
- Convertible loans
- Shares, i.e. return dependent on results
- Non-financial returns, e.g. product, service, right to participation, etc.
- Donations, i.e. zero return
Combinations of any of the above are also possible. No financial intermediaries are involved in the crowdfunding process because entrepreneurs and investors are in direct contact with one another.
Is crowdfunding an option for me?
You can use the following criteria as a checklist to determine whether crowdfunding is the right option for you.
- You've got an appealing plan stating what your funding is for.
- You've already established an enthusiastic network of people who may be prepared to invest in your plan.
- You're offering an attractive and clearly defined return on investment.
- You've got the time, experience and energy to get a lot of people enthusiastic about investing in your business or idea.