Even if crowdfunding is an easy way to raise money and awareness for your organisation’s idea, campaign or project, and by creating a crowdfunding website you can reach supporters, donors and funders, there are also some disadvantages.
According to Xero, 2018, crowdfunding has more benefits than you think:
- Validation: your organisation’s campaign can legitimize your idea and can help you reach the audience you want and that they are interested in your campaign and as a result will pay for this idea.
- Marketing: launch your campaign in order to spread out your message and as a result to reach more people. As a result communication skills are one of the benefits you will gain.
- Funding: you can engage with people and find out other funding opportunities such as loans, grants etc.
Furthermore, some of the disadvantages of crowdfunding are:
- Loss of a brand value: A not engaging story, not enough effort for your campaign, not a well presentation of your idea.
- Intellectual property risk: By publishing your idea on the internet, you could lose control over your intellectual property. Have in mind and make sure that you are using all the necessary copyright marks and paperwork before publishing your idea.
- Time and Effort: In order to prepare a crowdfunding website and campaign, you should consider an amount of time (one month and more of preparation). You should have in mind that you may spend time applying to the platforms, and not result in any finance being raised.
Crowdfunding in Cyprus
At the EU level, even if there is no law on crowdfunding, there are political agreements and regulations that aim to improve access to crowdfunding and enable investors and donors on crowdfunding platforms to benefit from a better protection regime.
Cyprus, and more specifically CySEC (Cyprus Securities and Exchange Commission) has proposed the introduction of rules on investment-based crowdfunding. These rules will recognize crowdfunding as a specific mode of financing and will provide basic regulation on the activities.
An active platform that exists in Cyprus for crowdfunding is www.wehug.org