Crowdfunding is an increasingly famous alternative for obtaining financing.
It is based on the presentation of a project to the public, usually through websites dedicated to it, getting funding from donations from people interested in the creation of the project.
This system is generally used to financing original ideas, that people see as beneficial and / or useful for themselves as well as promote entertainment products like games.
Everyone has the possibility to publish their project, that may provide an exit option after graduating for those who wish to undertake and lack of means.
- Basic Crowdfunding: Individuals contribute their money without expecting anything in return.
- Equity crowdfunding: The company makes a popular round of funding, and in exchange of money, if successful, the shares are distributed among taxpayers.
- Trading: If an object is produced by crowdfounding, when the project is finished , the taxpayers receives a copy.
Many states have expressed concern because this method of financing because, this implies a possible "desbancarización" where is possible to finance a project without borrowing from banks, so pretend to limit it.
Spain has decided to limit to 3,000€ the contribution from private investors to a single project and 6,000€ during a period of twelve months, although if you have great income and patrimony, investors will be able to contribute up to 10,000 euros. Theoretically this measure is destined to protect investors.
Likewise has been decided to limit to one million euros the maximum funding you can get a crowdfunding project, although in foreign countries has reached ten times that amount achieved. Luckily this measure wont be apply to the basic crowdfunding or trading.
Motivations of Crowdfunding
One of the major crowdfunding motivations is to support creative projects that do not fit the standards required of companies that currently control the capital. Thanks to donors, projects that had no future, are feasibly powered by society. It is a great contribution to the culture. The only downside is that the developer is exposed to someone copy him.