Recently I received an e-mail seeking my participation in funding a film with a social objective, and it uses one of the platforms for “crowdfunding.” This is my first time being contacted for such a project, and so I wanted to bring the information to readers of our BBB Consumer Education blog. I’m still considering whether to participate in this venture or not.
I was unaware that raising funds through this means has been around for years, and I learned that the way it’s done today is more than 20 years old.
Crowdfunding seeks small contributions for a variety of causes, whether for charities or for-profit ventures. It bypasses traditional means of raising funds and finding backers for projects. One such venture was done by fans of a musical group, and with no outreach from the band. In 1997, fans raised $60,000.00 to fund a band’s American tour.
Crowdfunding is also used to obtain loans from individuals interested in supporting startup ventures. If you’re interested in supporting things as a startup business or other ventures, do your research on the project, the people seeking the loan, and check out the terms of the loan, including the APR, amount of the loan that is sought, and terms of repayment. This bypasses traditional sources of loans, and relies on individuals who are willing to take a risk on a business startup or the like.
There are a number of sources providing crowdfunding, and make sure to get as much information as possible before you decide to give, invest, or provide a loan. Some projects have deadlines as to when a specific monetary goal must be reached. If the goal isn’t reached by that date, then you should be receiving a refund of your investment.
As with many offers, where the venture is valid, still, we must be very careful before choosing to fund a business venture, donate funds, or provide a loan because the possibility of fraud exists.
For more information, visit http://www.bbb.org/blog/2013/06/crowdfunding-sites-grapple-with-fraud/.
To obtain business reviews, charitable giving, and more, visit www.bbb.org/evansville where you can Start With Trust®.