Keeping the traditional investment options aside, currently, the most-happening type of investment is crowdfunding. Crowdfunding is a way of investment where a large group of investors can invest a small amount of money each. Entrepreneurs can pitch in their ideas and interested investors can put their investments in the venture. Be it any kind of business, irrespective of the sector, investors and entrepreneurs can make use of Crowdfunding.
How different it is from other investments?
In recent times, most of the successful investors are adapting crowdfunding considering its distinct working principles. It is different from other investments in several ways. Like,
The number of investors: Usually, one or more investors can invest in a particular business. Whereas in crowdfunding, a large group of investors can take part.
A small amount of investment: Crowdfunding doesn’t require huge investments. An investor can invest a small amount of money into various sectors.
The way of approach: Investors can find crowdfunding accepting ventures through crowdfunding platforms or online via social media.
Low risk: Making a small investment will safeguard the investor during unfavorable times which is not most welcomed in traditional investment methods.
Crowdfunding types and platforms
As said earlier, investors can find investment opportunities online via social media or at crowdfunding platforms. But before exploring the various crowdfunding platforms it is important to understand the types of crowdfunding. Crowdfunding types usually vary with the way returns are provided to the investors. Some of the crowdfunding types are,
This is for investors who are looking to invest in a business(startups, real estate, etc.) and get some profit. In this case, an investor buys a small share in the business. Even though this is quite similar to the traditional investment option, this involves several investors where each investor will get a small share in the assets.
Peer-to-Peer based crowdfunding
This is like lending some money to set up a business or be it any purpose. The investor can get his money back with some interest rate after a certain period of time.
Once the investors decide the crowdfunding type, he can verify and select amongst the several crowdfunding platforms available.
Crowdfunding investment options in the UAE
Like any other nation, crowdfunding started trending all over UAE. Crowdfunding investment facility is provided on several ventures like software startups, industries, real estate, etc. As UAE is observing quite a lot of crowdfunding approach, which indeed resulted in the rise of several crowdfunding platforms like SmartCrowd, Durise, Humming Crowd Reality(HBR), Beehive, Eureeca and many more.
SmartCrowd – SmartCrowd offers real estate based crowdfunding. It is well-known in offering qualified properties to investors only after a comprehensive screening process. And this is the only real estate crowdfunding company which is regulated by DFSA(Dubai Financial Services Authority).
Durise – This provides real estate crowdfunding investment opportunities for low investments.
Humming Crowd Reality(HBR) – It provides investment options for start-ups, SME and real estate ventures as well.
Beehive – Beehive offers peer to peer based crowdfunding investment options for SMEs.
Eureeca – It is an equity-based crowdfunding platform that connects the investors and entrepreneurs.
Advantages of crowdfunding investment
Being a successful way of investment, some of the advantages of crowdfunding investment are:
- Low investments can be made
- As the investor invests a small amount of money they can invest in several ventures
- The probability for loss is less when low investments are made
- Can build the network and get to know many successful investors
Most of the investors look for investment options that can gain them some decent profits. And one of the best ways for it is crowdfunding. As some wise man said “Don’t put all your eggs in one basket”, crowdfunding investment follows this perfectly.