INDIA CROWDFUNDING
INDIA CROWDFUNDING

INDIA CROWDFUNDING PLATFORM
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India Crowdfunding is the first platform dedicated to India crowdfunding. With India-Crowdfunding.com you will be able to act as investor, donor, lender or act as funds receiver.

In India crowdfunding is not new as it is based on a centuries old concept based on donation (chanda) as a contribution of many donors for a social or religious cause like the building of a temple. Crowdfunding market in India is still small, the potential however is incredibly high in view of the size of the population.

Crowdfunding is in India the ideal place to act as alternative financing. India has a huge start-up culture with start-ups which have constant funding needs. On the potential donor side, the enormity of India’s crowd presents exceptional crowdfunding opportunities: India has a population of over 1.4 billion people.

In India crowdfunding presents several advantages to both, investor and borrower. Mainly because fundraisers can avoid to undertake a public offer which is regulated under the Companies act and which impose restrictions in case a fundraiser deals with fifty or more investors.

In India Crowdfunding in form of an online platform allows to an entrepreneur to promote a project and monetise it to millions of potential investors without using a commercial bank. The Indian crowdfunding is so far a less risky way to invest as it includes the spreading of risk among several funds receiver.

India’s crowdfunding has proven to be a solid alternative to classic financing instruments. For any Indian entrepreneur, receiving financial backing or raising funds is a challenge.

Crowdfunding is emerging in India as a new way to raise funds for startups, inventions, charity or real estate projects. Crowdfunding is about the heavily contribute to the Indian economy through its involvement in the growth of SMEs.

REGULATION OF CROWDFUNDING IN INDIA

Crowdfunding in India is not yet properly regulated. However the Indian regulator has placed a Consultation Paper on Crowdfunding In India on its website for public comments.

The market is meanwhile confused as the Securities and Exchange Board of India (SEBI) which regulates market capital in India reportedly issued an investor warning notice to equity crowdfunding platforms questioning the legality of these platforms.

The Indian regulator has engaged in a complex exercise by expressing its interest in promoting crowdfunding to encourage SME businesses, however at the same time, imposing significant measures towards the protection of investors. The regulator wish is to limit crowdfunding to accredited investors with high eligibility criteria.

INDIAN CROWDFUNDING PLATFORMS

At the end despite the current reigning confusion as to the rules to be applied, platforms are already working in India. A large number Indian crowdfunding platforms have started successful stories. The crowdfunding trend is well progressing and has already provided with a few encouraging achievements.

INDIAN TYPES OF CROWDFUNDING

Like in other countries crowdfunding in India takes four different forms depending on the needs of the donor or investor and the fund receiver or borrower. The four current types of crowdfunding include:

  • Lending based crowdfunding: a crowd of lenders provides with loans to borrowers and expects principal to be repaid along with interests.
  • Equity based crowdfunding: investors inject funds in a project in exchange for shares in ownership.
  • Donation based crowdfunding: donors donate funds for a cause or a social project and do not expect any profit or return.
  • Reward based crowdfunding: donors give funds but expect just a reward in form of goods or services (ex: a CD for music crowdfunding).

INDIAN OPTIONS WITHIN CROWDFUNDING

In India for whatever the type of crowdfunding, there will be two different approaches to apply when it comes to fundraising: All or nothing and Take it all.

  • “All or nothing” is that if the funding objectives of the campaign are not achieved in case collected amounts are not sufficient to finance the project, all the funds are returned back to the donors.
  • “Take it all” is that even the target amount is not met, the receiver can keep the amount donated. This applies mainly for donation crowdfunding which is more charity related.

Above options have certainly an impact on the success of a crowdfunding campaign in India. Studies results suggest if a fundraiser is serious about getting a project, he or she should opt for the all-or-nothing fundraise option. This type of campaign involves larger capital goals and are much more likely to be successful.

India-Crowdfunding.com has selected for you the best online crowdfunding platforms in India.

INDIA CROWDFUNDING PLATFORMS BY SECTORAL DISTRIBUTION AND TYPE OF RISK