The jungle of crowd-terms
In the last post we told you what crowdinvesting is. You might also hear advice more often, like “Invest your money”! But invest it in crowdfunding” or “Crowdinvesting is the new stock market.” But what’s the difference? Aren’t they all the same thing? No! Today we are looking together at the most diverse forms of crowdfunding!
Once again, a quick reminder: in principle, crowdfunding is an umbrella term for all types of crowdfunding but at the same time it is its own kind.
Crowdfunding is the oldest and best known method of crowdfunding. Many small amounts from many investors mostly finance social projects. In return, the investors receive something in the form of a goodie bag or other material goods. In many cases, crowdinvestors are allowed to test the products before the public and get special privileges.
Crowdinvesting is a form of crowdfunding in which many investors take a financial or economic stake in a project. The crucial difference between crowdfunding and crowdinvesting, however, is that in the latter the consideration of the capital recipient is not in the form of material goods or privileges, but in the form of interest. Optionally, depending on the amount of their capital investment, the capital providers can also participate directly in the profits of the company.
A subordinated loan is thus created between the project starters and the investors. This means that the claims of the crowdinvestors rank lower than the claims of other creditors. In English, this form is also called equity-based crowdfunding.
But what about crowddonating? This is also a form of crowdfunding in which the capital providers have no claim to any consideration. It is a type of donation that can be organized via special crowddonating platforms.
Crowdlending is also a type of crowdfunding and is often also called lending-based crowdfunding or peer to peer. Here, a large number of capital providers grant a loan. The borrowers then repay the loan with interest within the agreed term. This form of crowdfunding is particularly interesting for those who need uncomplicated and fast lending without a bank. Crowdlending is interesting for capital providers because the chances of return are naturally higher. The higher the interest rate, the higher the associated risk of default. In addition, this financial investment is easy for most people to understand. The loan is based on clear and understandable terms. And best of all, the loan amount can be financed with small amounts starting from CHF 25.
But what about crowdsourcing? This is not a type of crowdfunding, but draws on the principle of crowdfunding. Here, the intelligence of the swarm is used. An example is when a sports company develops its products with the help of many athletes. In this way, internal work processes are shifted to the outside. In this way, a large number of experts can actively participate in company developments.
On CONDA.ch, you can engage in crowdinvesting. The projects offer a wide variety of opportunities for participation on our platform! Find out now about all the projects and opportunities.