How to build a crowdfunding business

Raising capital through crowdfunding

Looking for loans, investments or donations for corporate projects? Many crowdfunding platforms make it possible for Swiss SMEs to finance themselves directly with the help of private individuals instead of having to resort to traditional financial players.

Crowdfunding, also known as crowd financing, describes an alternative financing method that involves a large number of donors. Each only contributes a small amount of the total amount needed to launch a wide variety of projects.

Funders are usually mobilized via internet platforms that bring project planners into contact with financial supporters, mostly private individuals. In contrast to the other types of financing, crowdfunding runs without an intermediary. For SMBs, it's a great way to get capital without using traditional lenders like banks.

Sums provided increased

In Switzerland, the sums collected for 1,342 campaigns in 2015 amounted to CHF 27.3 million, according to the report Crowdfunding Monitoring Switzerland 2016 by the Lucerne University of Applied Sciences and Arts. That is 73% more than in the 2014 financial year. Between 2011 and 2015, the sums made available for projects or companies even increased ninefold!

In 2015, no fewer than 90,000 Swiss citizens made money available as donations or loans via a crowdfunding platform. The number of these websites has increased significantly in recent years. In 2013, 14 such portals were operated in Switzerland, in 2014 there were twice as many and in April 2016 there were around 40.

The different types of crowdfunding

There are four types of crowdunding. They differ mainly in the type of consideration that the supporters receive. It can be a monetary or other consideration.

Crowddonating

The supporters give money without expecting anything in return:

Crowddonating: online call for donations

Crowd support

The supporters give money and receive a non-financial consideration for their investment, for example the financed product before the official launch:

Crowdsupporting: Donors are rewarded

Crowdlending

The backers lend money and expect to get it back, plus interest in the form of fair compensation:

Crowdlending: loans without banks

Equity crowdfunding

This form of crowdfunding aims to finance companies. The supporters invest money and receive a co-determination right in the company or a profit sharing:

Crowdinvesting: Financing with calculation