Crowdfunding

Crowdfunding

Investors give money to causes without it being repaid.

This type of crowdfunding is most familiar due to its uses raising money for charity and disadvantaged people, although many businesses have also made use of it.

A genuine belief in the cause is necessary to support a case requesting funds in this manner, since the investment is not earned back. Despite this, it is a great way to support communities, locally or internationally. It can also prove to be very effective advertising for a blossoming company. Furthermore, the level of funding raised can really help to gauge the depth of public support for your cause, since it will show whether people are really interested in it doing well.

With experience and knowledge of the system, acorn.finance can help you to secure funding for your cause – be it charitable or business – on a win win basis, so that you can make the most of what crowdfunding has to offer.

Investors give money to causes in return for rewards.

Although very similar to donation-based crowdfunding, reward-based crowdfunding is likely to receive greater investment because of the potential for something tangible or financial in return.

If the rewards are suitably targeted towards the type of backer you wish to attract, then the funding can be greatly increased. See the story of the company “Tossed” on Seedrs (Tossed). Although Seedrs is not a reward-based platform, Tossed offered suitable rewards as part of their campaign and improved the amount they raised. 

Be careful to choose rewards sensibly so that you don’t price them too highly. Check the average investment on the platform you’re using so you know what to aim for. Contact acorn.finance to find out whether we can help you to raise the money you need through the most appropriate platform.

Investors lend money to causes, and as such expect it to be repaid with interest.

Unlike the previous two types of crowdfunding, with loan-based crowdfunding – in principal – you are eventually repaid your investment. This can be a great way to get quick funding for a business start up or expansion, especially if the banks have refused to lend, and the use of the internet means that backing can come from across the world, so you’ll end up with widespread support. The fact that individuals have invested their own money in your project means they have a vested interest in its success. As such, they are more likely to buy its good/services and spread the word of its existence.  

Funding Circle is a platform which operates in the UK, USA, Germany and the Netherlands, and has lent over £2.5 billion to over 25,000 businesses. One example of its work is the story of Rufus Grantham’s loan application to refurbish a derelict pub. He wanted to turn it into a popular bar. Funding Circle managed to secure him £104,000 from hundreds of investors so he could achieve his ambition.

Acorn.finance has worked with many people and companies to secure them a loan through crowdfunding or peer-to-peer investment (P2P). With P2P worth over 70% of the whole crowdfunding market ($25 Billion in 2015), and an estimated 2,000 platforms available worldwide, acorn.finance’s expertise could be a vital asset to your campaign. We will ensure that it is targeted, meaningful and launched through the best site for you.

There are also examples of loan-based crowdfunding where investors are choosing to fund businesses in the developing world. Zidisha enables poorer people in less affluent countries to secure capital to help start companies. The hope is that they will eventually be in a position to repay the investment. See our other blog articles for some case studies of Zidisha’s work.

Investors buy shares in the company with their investment.

The final type of crowdfunding rewards investors with shares in the company wanting funding. Much like with loan-based crowdfunding, investors are more likely to care about the success of the project. They will possibly look to advertise it to potential customers – even if they just tell their friends, it’s worth it. Furthermore, having a base of engaged shareholders means you are likely to receive useful collective feedback about the business.

All types of crowdfunding come with risks, although some are riskier than others. For starters, while the last two types (loan and investment) are regulated by the Financial Conduct Authority (FCA), the first two types (donation and reward) are not. This means that you cannot be sure of the legitimacy of the project or the platform. It is also possible that the project you choose to support will not succeed. In this case you will lose your investment and not receive any rewards to which you were entitled. This is particularly concerning when you consider that crowdfunding is not supported by the Financial Services Compensation Scheme (FSCS).

There are further risks with investment-based crowdfunding, which should be considered. If more shares are issued in subsequent rounds of funding for the company, the shares you own may be diluted. In most situations, there is also no secondary market, so your shares cannot be sold on if they begin to lose their value quickly. You’ll be tied in for the long run.

Despite the risks, which must be considered very carefully before investing, crowdfunding remains a very good way to build funding, grow the support of the target market and/or a stable of helpful shareholders, or invest your money in companies destined to flourish. With acorn.finance on your business’ side as you enter the world of crowdfunding, it will seem significantly less daunting. Raising money from the public over the internet is a fantastic, modern venture. Contact us so that you can be part of its success.

Francisca Awuor – Retail

Francisca Awuor

Crowdfunding for those who need it most.

Crowdfunding is something that we value here at acorn.finance, which is why we take part in peer to peer lending through Zidisha.org.

Francisca’s story stood out to us, as after working for a small wage that couldn’t fund her family for 16 years, she aspired to set up her own small business to improve her quality of life.

Her ambition and intelligence was striking and on a pedestal against many others; with a well thought through business plan, it was hard to come up with any reason not to fund her.

Funding people in such a way is an investment in their future, as it is a long-term solution to aid rather than immediate relief. It assists people in starting their future and building their dreams! Which is what acorn.finance as a commercial finance broker do on a day-to-day basis.

Read our blog post for more updates and stories on what we’ve done whilst working with Zidisha.org.

Adu Kwame – Tailoring business

Adu Kwame

Crowdfunding for those who need it most.

Adu Kwame shared her inspirational story on Zidisha.org, and no doubt immediately caught our attention!

Above all, her mind was focused on business. After finding her gap in the market, she went onto set up a tailoring business in Ghana. And with three years of success, she is now in a position where she would love to expand.

At acorn.finance, we deal with many start-up companies and understand the issues small businesses face – which will be even more of a struggle in developing countries.

Adu had calculated her finances and how much was required to purchase a shipping container and transform it into her own tailors. This is when we came in and offered our support to Adu for her final step.

Acorn.finance believe in investing in those who are in an unfortunate position. Which is why we have chosen to give 10% of our profits per year towards investing in those whom need it most.

Check out our blog post for more information and updates on what we’ve done with Zidisha.org!

Oppong Maxwell – Printing organisation

Oppong Maxwell

Crowdfunding for those who need it most.

Oppong Maxwell is an entrepreneur based in Ghana.

During the course of this year we’ve been able to help him with his business requirements on three different occassions.

Oppong required a small loan in order buy another printer to advance his printing organisation, that was earlier in the year and having repaid that loan he’s come back to Zidisha for a further loan to purchase a laminator and cutting machine.

Showing great ambition when talking about his dreams of expanding his business, acorn.finance decided to help him finance his organisation.

Offering a loan to Oppong Maxwell, Ghana, to finance assets crucial to his dream was a quick decision for us. Oppong updates us on his business, even sending us pictures of the equipment we’ve helped him to fund!

It’s amazing being able to help someone in the the long term, providing them a future, rather than just giving aid.

We take pride in our social responsibility here at acorn.finance.

Oppong isn’t the only person we’ve helped through Zidisha.org, check out our blog post for more stories and updates.

Oppong Maxwell     Oct 30, 2017

I appreciate the support you pushed me with as lenders because I am still realising how good this loan has make me because used the loan to buy a laminator or machine for lamination and it has really helped me me a lot because the last time I checked I used it to cover about 150 A4 certificates and it has really given me much profit I really thank you as my lenders God richly bless you for the good support you have been doing for us I pray that God gives you more so that you can continue to help us thank you

Susana Asieduaa – Funding for a boutique shop

Susana Asieduaa

Crowdfunding for those who need it most.

Offering a loan to Susana Asideuaa, Ghana to grow her boutique clothing store was an easy decision here at acorn.finance. Susana’s story was touching and we wanted to help straight away!

After not being able to fund her education, she decided to enter the clothing trade and set up her own business. After her start-up had developed, she wanted to grow her business even further, but couldn’t do this without the help of Zidisha.org. Which is where acorn.finance stepped in to offer financial help.

Since then, Susana has repaid us 100% of the loan amount, whilst also commenting on how thankful she is for this opportunity seen as though she couldn’t access normal lenders through banks – often with sky high interest rates.

We take pride in our social responsibility here at acorn.finance. Susana isn’t the only person we’ve helped through Zidisha.org, check out our blog post for more!

Noris Soti – electricity equipment.

Noris Soti

Loan to fund his electricity business.

Here at acorn.finance, we helped Noris Soti, 24 Ghana, to build his dream of being an electrician.

He required finance for the set-up of his business where he was to sell electrical equipment. In which he would supply to builders as well as households. Noris needed the funding to buy this equipment in bulk to be able to supply at a profitable price.

As a relatively small business, acorn.finance knows the difficulties that start-ups often face, drawing us to help Noris by funding him through Zidisha.org.

Since then, he has repaid us 100% of the loan amount, he has also left comments on the success of his business, letting his lenders know what he has bought and how it has helped his business’ growth!

Noris isn’t the only person we’ve helped through Zidisha.org, check out our blog post for more!