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In: Finance

What is a good response to discussion below: The crowdfunding site I chose to use is...

What is a good response to discussion below:

The crowdfunding site I chose to use is Indiegogo. This crowd fund uses reward-based crowdfunding. This involves raising funds for a new startup or organization that offers a product or service. Indiegogo focuses on project-based crowdfunding. I thought this was a great variation of crowdfunding because it introduces you to groundbreaking products and allows you to be involved in helping them take flight. You get the opportunity to support entrepreneurs and new technology from its beginning stages of development. I find it really cool to have the option to be a part of spring boarding some type of product people may want. Movies have even been included with Indiegogo, one is Super Troopers 2! Indiegogo charges a 5% platform fee and the payment processing fees range from 2.9%-3.9%. Since Indiegogo features project-based fundraising it is different then some other platform options which are designed for nonprofit fundraising. Indiegogo’s platform doesn’t allow you to keep raising money as your organization grows because of this project-based platform. By contributing on a project in Indiegogo you receive “perks” based on your contributions. The crowdfunding project I decided to choose was Midea: The window air conditioner, reinvented. I thought this was a cool idea especially considering all the window units in Pittsburgh. The AC unit is faster, and efficient. It saves 35% more energy than the traditional window ac and also allows you to still open your window. The U-shaped design blocks noise out and makes if faster and easier to set up as well. Midea is currently in the production of turning their prototype into the final product. $329 for the price of a 12k BTU unit isn’t too shabby either considering its not too far off from traditional pricing.

Solutions

Expert Solution

Firstly we will know what crowd funding is and how it works.

Crowd funding

If a company or person wants to raise money through crowdfunding, they can pitch for it by posting details of their project, business or idea on a crowdfunding website. This means they can avoid going to a bank. The ‘crowd’ in crowdfunding refers to the people, or organisations that provide the money.

How does crowdfunding work?

If you visit a crowdfunding website, you should be able to see an overview of the projects being pitched. You might need to register with the website in order to see the pitches, to get more details.

Now coming to the above discussion

In recent years, one of the most exciting developments for investing has been the development of investment in crowd funding. With this new type of investing, there is a chance that you could make money from start-ups, expanding businesses and new products.

However, before you dedicate money for investment in crowd funding, it’s important to evaluate the situation to see if it’s right for you. For this you can use Reward based crowd funding with proper product and the demand for the product. You can analyse this on base of below points.

  • Risk factor involved
  • What is the product demand
  • What would be the rewards if it is reward based crowdfunding

In above scenario the crowdfunding which has been selected is Indiegogo you can compare rate of this website with other website for crowdfunding available and then finalize the website. The other thing which I notice is that you have selected Midea which is well known company in the field of air treatment hence you can analysed the previous performance of the company and determine what would be demand and will the company be able to fulfil it. If this condition matched then you can go with Indiegogo and Midea for your corwdfunding investment.


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