It’s been spoken about a lot and we are part of the sharing economy. What is the sharing economy? The sharing economy is when people share products and services. A perfect example of this is Uber, where people share the services of a cab and hence everybody benefits. Another great example of why the sharing economy works is CrowdFunding Singapore.
So What is Crowd Funding?
Back in the old-days when people had a product in mind, they had to get put in an initial investment or ask their friends and family to contribute capital to get things started. Even in the 1970’s it was common to get funding through Angel Investors and Venture Capitalists.
But over the past few years because of services like Kickstarter, the crowd funding way of raising capital began. Crowd Funding is basically when a lot people get together and contribute money in return for the product and hence in turn help the company raise enough capital to cover their costs and make a profit.
CrowdFunding requires a lot of people to participate to make something successful. A good example is a product from Kickstarter that went Viral. It was for a portable 3D printer.
Crowd Funding allows different funding amounts for different services. In the above example, It starts off with $19 and goes all the way up to $10,000. This is the power of crowd funding. This particular Kickstarter campaign had a total of over 13,000 backers who had raised over $1.8 Million.
Crowd Funding in Singapore
Companies in Singapore do not lack in creativity or Innovation. As the Singapore market is a very competitive space, it can get difficult for young companies to get funded among the plethora of startups that are vying for the VC’s attention. If you have a great product and a good social circle to start with, Crowd Funding can be a great way to start off your business.
Singapore does not lag behind in terms crowd-funding services and there are a host of options available that offer funding services. This is a novel way to get businesses connected with Investors.
The landscape of Crowdfunding Singapore is competitive and has opportunities for any kind of business and not only a physical business.
Some players in the Singapore market are New Union, Coassets and Moolahsense. These three crowdfunding Singapore websites work on a different model compared to that of Kickstarter. In this model, Investors invest money into the business and look to make returns from it. This guarantees two things, that is serious Investors who want the company to do well and also the diversification of risk. When more Investors put in money, the risk for every Investor comes down.
The successes of these platforms can be measured by the Investments that have already been made. New Union has transacted over SGD $35 Million and over SGD $600 Million throughout Asia. Moolah Sense has over SGD $37 Million that could be Invested in SME’s(Small and Medium Enterprises) and Coassets has helped over 50 businesses raise over SGD $43 Million. That is almost close to one million for a particular company.
The best part of these Investments is the time frame of Investment and the returns that are expected and also the amount of investment which are usually term loans.
These websites offer opportunities in businesses in different Industries helping in diversification of an Investor’s portfolio.
This is a great way of doing business in such a highly competitive market. It’s difficult for businesses to reach out to high profile Investors and most of the times, these businesses just need quick loans to pursue better opportunities like investing in new machineries, invent new products and/or opening new outlets for expansion. That is where crowdfunding Singapore comes in. A bunch of people come together and help a business rise and in turn make wealth. This is truly a sharing economy and you should be part of it!
By Jon Ng Google+
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