Crowdfunding allows you to finance a project through the pooling of contributions, donations, and purchases from many people. This is a new way for inventors to raise funds. You can also invest in real estate crowdfunding platforms or property crowdfunding via Invest In Club.
The New Law – Investments
You can now take in money, but small investors must be cautious about investing in it. The CROWDFUND Act, officially known as “Capital Raising Online While Deterring Fraud & Unethical Non-Disclosure Act”, was passed recently.
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This law will allow private companies to raise up to $1 million within a 12-month period through stock sales via authorized crowdfunding sites. The rules for authorized crowdfunding sites are not yet in place so it’s important to keep your eyes open for any changes.
Crowdfunding: How it Works
Upload a video about your invention to one of these sites. Next, list the amount you want to raise and what offer you have. A finished product, royalties on sales, or any other offer you might be interested in can all be offered.
If the inventor achieves his or her goal, 4% to 6%, and sometimes more if they fail, plus credit card processing charges of up to 4 percent. You should be clear about when and how much money you can get if crowdfunding is used as a way to raise money.
Tips for success
Be sure to carefully review the site and avoid paying upfront fees. Crowdfunding sites can be started by many people, and some sites may try to scam you.
Upload a personal clip – A personal video that tells a story or promotes a cause will help you raise more money on crowdfunding sites.