1. Here's What You Don't Know About Fundraising That Could
Save You Time, Energy and Money
How 3 Crowdfunding Platforms are Changing the Paradigm
The digital age has bought fundraising to our fingertips and made raising money
easier for nonprofit organaizations and businesses worldwide. With a plethora of
online crowdfunding platforms to choose from, fundraising for nonprofit
organizations and fundraising for small business ventures has become easier
although for both the backers and fundraisers, there are many challenges.
First a little background on crowdfunding; crowdfunding is the practice of
funding a project or venture by raising small amounts of money from a large
number of people, typically via the Internet. Crowdfunding is a form of
crowdsourcing and alternative finance. In 2015, over US$34 billion was raised
worldwide by crowdfunding and $34 Billion have been raised through
crowdfunding worldwide in 2020. 78% of successful crowdfunding campaigns
exceed their funding goals. An individual crowdfunding campaign raises an
average of $568.
The Challenges with Crowdfunding
⦁ There are no guarantees for backers, hence they can only rely on and trust
the founder of the campaign they support;
⦁ High fees and hidden costs;
⦁ Creating a campaign is expensive and legally challenging;
⦁ Large projects with a budget for PR and marketing overshadow smaller
campaigns and projects with a liimited budget;
⦁ Rather than investing time and money in sales or product development,
founders spend invaluable assets on creating landing pages and
advertising campaigns from scratch;
⦁ Market fragmentation negatively affects potential backers;
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2. ⦁ According to statistics, 80-90% of projects that raised funds did not
release their product to the market. As a result, a huge number of people
lost not only their money and their faith in crowdfunding.
⦁ Traditionally, a crowdfunding platform acts as an intermediary and the
decision-maker. It has the power to decide which projects are worthy of
funding. This tradition still takes place in many platforms, even
blockchain based however our #1 pick has designed a code that
decentralizes this decision making and funds all projects in its Que..
With blockchain technology and tokenization, crowdfunding is not
only easier and less expensive its also trustless.
The beauty in Decentralization: Nonprofit organizations and startups are no
longer beholden to the rules, regulations, and whims of the most popular
crowdfunding platforms on the internet. Literally, any project has a chance of
getting visibility and getting funded.
Any project using a blockchain-based crowdfunding model can potentially get
funded. Also, any person with an internet connection can contribute to those
projects in a trustless way. Blockchain-based crowdfunders wouldn’t have to
worry about the “fraud” that has plagued modern-day crowdfunding projects.
Instead, Smart Contracts enforce funding terms: There are several ways in which
blockchain-enabled smart contracts could provide greater accountability in
crowdfunding. Primarily, these contracts provide built-in milestones that would
prevent funds from being released without provenance as to a project or
campaign’s legitimacy. This prevents large sums of money from being
squandered by those who are either ill-intended or not qualified to run a
crowdfunding campaign.
This list of the top 3 fundraising platforms that have addressed these
issues to help fundraisers receive funding without exhorbant fees,
waiting for backers or a large marketing budget:
1. www.OOMIFunds.org - is a crowdfunding site built on blockchain technology
with its own cryptocurrency, which tokenizes the entire funding process through
a smart contract attached to its OOMI token. The OOMI protocol is a Stellar
Smart Contract on the Stellar Blockchain designed to allow nonprofit
organizations and small businesses fund each other's project by collateralizing
their project with the equivalent of $120 USD - $3,040 USD in Stellar Lumens,
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3. Bitcoin or Ethereum. The amount of OOMI tokens a fundraiser purchases
determines the amount of funding to be received according to three cunding
pools worked into its protocol. A fundraiser can receive the equivalent of
$40,000.00 (Forty-Thousand USD in Stellar Lumens XLM) to as much as
$250,000.00 (Two-Hundred Fifty Thousand USD in Stellar Lumens XLM).
Thereby eliminating the need for an angel investor or backer to fund projects.
and exceeding the average amount of money typically raised on traditional
crowdfunding platforms.
Nonprofit organizations, NGOs and Startups alike can help each other while
helping themselves. The platform is run by OOMI token holders and governed
through the OOMI DAO, a decentralized autonamous organization. This solves
the issue for backers since the system is closed ended and funded by others
collateralizing their own projects. It's a very unique idea that is going viral and
has the potential to solve many of the issues with traditional crowdfunding
platforms.
Crowdfunding is a massive and ever-expanding industry. One can easily get lost
on how to start and how to run a successful crowdfunding campaign. However
with OOMI there's no need to spend marketing dollars to find backers. The
system is marketed by its strategic partner, levelupadvisors.com with a full
salesteam, social media marketing campaigns, celebrity endorsements and much
more. The levelupadvisors.com e-learning system for entrepreneurs is designed
to help small to medium sized businesses start or scale any business. The OOMI
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4. DAO was developed with the students of levelupadvisors.com in mind. The e-
learning platform helps students fund their businesses.
Pricing: Besides the collateral required to start the campaign, up-front fees are
nominal compared to other platforms that can charge as much as $1000+ per
month with no guarantees of funding. Additionally, the OOMI DAO has settled
on one flat fee of $3,500 for each funded grant. For more information go to
www.oomifunds.org
2. www.gitcoin.io -Gitcoin provides grants for developers and consists of a
community of builders, creators, and protocols at the center of open web
ecosystems. People come to Gitcoin to develop their future, and the future of the
open internet. Gitcoin Grants uses quadratic funding, ensuring that projects
doing the greatest public good get the most support. Whereby projects are
selected according to the committee.
Pricing: Gitcoin grants is free, although we do deduct a 0.00001% fee from
each grant contribution to cover the gas costs of running our subscription
subminer.
3. https://wefunder.com - Backers can invest as little as $100 USD and
fundraisers are mostly small businesses. The platform was released in 2012 and
has become very popular in the media being the first platform to accept Bitcoin.
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5. Pricing: Since wefunder is a traditional crowdfunding platform that also
accepts bitcoin, its not a decentralized blockchain based exchange and charges
based on SEC regulations. For Reg CF, Wefunder charges 7.5% of the total
fundraise, only if successful. For instance, if a company raises $100,000, we
charge $7,500 upon close. For Reg A+, we charge a flat fee of $375K. This is 7.5%
on a $5M raise.
It accepts the funds in terms of US dollars and maintains a stable funding
process. When the bitcoin investors claim for reimbursement, it is provided as
per the current market value of the coin. Their website claims that around
625,350 investors raised funds around $137 million for 386 startups.
References
Ahmed Banafa, Author the Books:
Secure and Smart Internet of Things (IoT) Using Blockchain and AI
Blockchain Technology and Applications
References
1. https://www.bbvaopenmind.com/en/economy/business/how-blockchain-is-
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6. revolutionizing-crowdfunding/
2. https://due.com/blog/a-new-era-of-crowdfunding-blockchain/
3. https://www.disruptordaily.com/blockchain-use-cases-crowdfunding/
4. https://en.wikipedia.org/wiki/Crowdfunding
5. https://www.crowdcrux.com/crowdfunding-statistics-in-2020/#:
~:text=%2434%20Billion%20have%20been%20raised,raises%20an%
20average%20of%20%24568.
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