Crowdfunding
Crowdfunding is a form of investment that has become increasingly common in recent years. Crowdfunding can be a good way to test the demand for your product. If there is a lot of interest, it may indicate that the product will also work well in the market once it is developed.
What is crowdfunding?
Crowdfunding involves a large group of individuals contributing small amounts of money to help finance a business, rather than one or a few investors contributing a larger sum. Fundraising is done through crowdfunding websites, and the investors are often unknown to the entrepreneur.
How does crowdfunding work?
Briefly put, crowdfunding is based on a crowdfunding website where the entrepreneur can present a business concept and seek financial support from individuals and companies. The website acts a bit like a bulletin board, where many different business concepts are presented at the same time.
The approach can vary, with some entrepreneurs asking for pure donations and others offering benefits in return for a fixed investment amount.
It is also common for customers to be given the opportunity to pre-order the product in return for advance payment. In this way, the entrepreneur raises capital to implement the business concept, and the customer receives the product at the earliest opportunity.
In many cases, the entrepreneur sets an investment target that must be met for the idea to become a reality.
Tips for a successful crowdfunding project
Do not forget to protect your product
Keep in mind that if you as an entrepreneur have any interest in applying for a patent for your product, participating in crowdfunding may mean that the product can no longer be protected.
Act on Distance Contracts and Off-Premises Contracts
Crowdfunding is subject to the Act on Distance Contracts and Off-Premises Contracts (including for advance sales) The Act imposes a number of requirements, including the information that must be provided both before and after the contract is concluded.