Comprehensive Research Report on Crowdfunding: Models and Platforms

This report provides a detailed overview of crowdfunding, starting with its background and explaining its increasing popularity as a fundraising method. It outlines the four main crowdfunding models: donation-based, reward-based, equity-based, and debt-based, describing how each functions and the incentives they offer to contributors. The report then explores various crowdfunding platforms, such as StartEngine, SeedInvest, and Indiegogo, highlighting their unique features and the sectors they cater to. It emphasizes the relevance of understanding these models and platforms, offering insights into the practical applications and importance of crowdfunding in the modern business landscape. The report includes references to relevant academic sources to support its analysis.

Running Head: RESEARCH 1
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Assignment title: Research
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RESEARCH 2
Crowdfunding background
Crowdfunding is a method of raising funds through a collective manner involving friends, family
members, customers at the place of work, and also individual investors. This method of raising
funds aims at joint efforts involving a large group of people. There are various methods through
which crowdfunding can be done with the primary way of being online through social media
contributions and collections (Amuna, 2019). Other processes involved are; creation of
crowdfunding platforms with the aid of money generation and leverages of networks aimed at
achieving greater and reach all individuals who may be willing to make their donations.
The four main crowdfunding models are; donations based on crowdfunding rewards based on
crowdfunding, equity-based on crowdfunding, and lastly, debts that are based on crowdfunding.
For the model of donations that are based on crowdfunding, this is a case where the company or
an individual who is running the campaign for donation is not allowed to give anything in return
to the people who give their contributions (Chemla & Tinn, 2019). Here, people give their gifts
to the company or individual running the process simply because they want to support this whole
idea. For a rewards-based model of crowdfunding, this is where individuals who give their
contributions have expectations of getting rewards that correspond or are equivalent to the
number of funds they give (Rossi, Vismara, & Meoli, 2019). So, they offer to get. For the equity-
based model of crowdfunding, this is where the person who is giving contribution can have
expectations of receiving some form of ownership of shares in the company raising funds.
Lastly, in a debt-based model of crowdfunding, this is where, individuals who give their funds
receive a binding agreement from that company stating procedures to be used in repaying that
money within a given time and an agreed interest (Ellman & Hurkens, 2019).

RESEARCH 3
Crowdfunding is used because; it serves as a more effortless channel for marketing, it provides a
more accessible mechanism for capital access, reduces risks, introduces an individual to
prospective and understanding of loyal customers, serves as a more affordable and convenient
way to raise funds and lastly, it provides a more relaxed opportunity for pre-selling purposes.
Crowdfunding has gained popularity across the globe, contributing to its enormous success.
Many times in recent years, crowdfunding has achieved a great achievement for its intended
purpose (Landström, Parhankangas, & Mason, 2019).
Platform background
A platform is simply the environment where a piece of software is executed or operated. This
may comprise the software, hardware, or any operating application as far as the command is
executed on it. There are a variety of CF platforms, some of them are; StartEngine which is
known to offer interests in new companies to any individual interested in it covering a wide
range of sectors from clothing to health care, SeedInvest which is known to allow regular
investors who do not qualify to be accredited investors to invest within this platform, and lastly
Indiegogo a platform where clients can quickly raise assets from individual sponsorship (Lehner
& Harrer, 2019).
Relevance
This report helps in understanding crowdfunding in detail, models used in it, and their
importance. Also, it gives knowledge of platforms and various crowdfunding platforms.

RESEARCH 4
References
Amuna, Y. M. A. (2019). Crowdfunding Financing Model effect on Entrepreneurship
Aspirations. Technology, 3(1).
Chemla, G., & Tinn, K. (2019). Learning through crowdfunding. Management of Science.
Ellman, M., & Hurkens, S. (2019). Optimal crowdfunding design. Journal of Economic Theory,
104939.
Landström, H., Parhankangas, A., & Mason, C. (Eds.). (2019). Handbook of Research on
Crowdfunding. Edward Elgar Publishing.
Lehner, O. M., & Harrer, T. (2019). Crowdfunding revisited: a neo-institutional field-
perspective. Venture Capital, 21(1), 75-96.
Rossi, A., Vismara, S., & Meoli, M. (2019). Voting rights delivery in investment-based
crowdfunding: a cross-platform analysis. Journal of Industrial and Business Economics, 46(2),
251-281.