What’s so special about rewards-based crowdfunding?

Here are the three main reasons why a company should use a  rewards-based crowdfunding platform to finance its project:

1-It validates your product!

You have a product that you really love and that you’re sure that no one has ever thought of before. You’re convinced that it will sell well in the market and your friends and family tell you they love it. But you, your friends, and family aren’t the best source for an unbiased evaluation.

Until you put it in the market, you can’t be too sure if it will sell or not. What you need is to find a sure-fire way of knowing the public’s reaction to your product before you start selling it.

Reward based real estate crowdfunding
Source: giphy.com

That is where crowdfunding comes in. When your crowdfunding campaign is successful, it means that there is a genuine interest in your product. Think of it as offering your product at a discounted price; those who fund your crowdfunding campaign, are just pre-ordering your product.

2-It offers real-time feedback

Most crowdfunding campaigns now offer polls and surveys to let you know what people like best about your product and what they’d want to be changed. Not only does this allow you to shape your product according to your customers’ desires it is also done in real-time, meaning no time lost!

But the best part is that you make your crowd feel special. By listening to their suggestions and making them feel that their input is important, you made them feel part of a community.They will proudly tell their friends about the part they played in your product. Free marketing!

You’ve created a loyal community for your product before you’ve even entered it in the market.

3-It is an alternative source of funding

Let’s be honest, not all products are going to get an initial enthusiastic response.

For example, can you see a bank funding this product?

Alternative source of funding
Source: kickstarter.com

Probably not. And yet, through the Kickstarter crowdfunding platform, it got a funding of $195,094, way above its goal of $70,000!

Sometimes it is the unlikeliest of products that get the highest success. Crowdfunding allows companies to get financing for their products that they normally wouldn’t be able to through conventional channels. Through crowdfunding campaigns, companies have access to thousands of potential investors. It also allows them to meet their niche customers more efficiently.

Overall, there are four types of crowdfunding: rewards-based crowdfunding, donation-based crowdfunding, equity crowdfunding, and lending or P-2-P crowdfunding. Here at Ethis.co, we offer P-2-P crowdfunding in our social impact projects.

Through our P-2-P crowdfunding campaigns, we have been able to collect funds of more than $4 million for projects worth $30 million from ordinary investors, in the past three years. Our projects are already making a positive contribution to the lives and welfare of people car reviews and release date. We believe that crowdfunding campaigns will make a difference in social impact projects and in Islamic finance in general.

It is estimated by the World Bank that by 2025 the global investment through crowdfunding will be $93 billion.

There are plenty of reasons why crowdfunding is growing in popularity every year. If you can think of any, please leave them in the comments section below. We always like to hear from you!

Read more on What Is Islamic Crowdfunding?

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We operate ethical investment platforms approved by regulators in Indonesia, Malaysia, and Dubai, and also run a charity platform Global Sadaqah serving ordinary people, high-net-worth individuals, corporates and government entities. Best known for crowdfunding impact investments for Indonesian social housing development projects we adhere to the United Nations Global Compact ethical standards and are based on Islamic finance.