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Crowdfunding has emerged as a popular method for raising funds to launch a unique idea or service. An interesting alternative to the traditional methods of financing, entrepreneurs use crowdfunding to raise “small amounts of money from a large number of people”* by reaching out to them online, primarily through social media.

 
What are the benefits of crowdfunding?
 


How is crowdfunding different?

Crowdfunding platforms provide entrepreneurs a unique opportunity to showcase their idea to a large, interested audience that can invest in the business in exchange for equity or a reward. This is in stark contrast to the traditional methods of funding wherein entrepreneurs spend considerable time to pitch independently to a small pool of banks, angel investors and venture capitalists to pump money into their idea.


Benefits of crowdfunding

A crowdfunding campaign is a great way to not only raise funds but also gain visibility for your business. Let’s discuss some of these benefits below:

      Fundraising
      Fundraising is usually one of the main aims of crowdfunding campaigns, as raising finance is one of the biggest hurdles faced by entrepreneurs while building or scaling businesses. However, compared to taking out a business loan or seeking individual investors, setting up a mass crowdfunding campaign on a platform such as Equitise can quickly get your message across to a much larger audience effectively.

      All you need to do is choose the right crowdfunding platform, craft an honest story highlighting your wins and set up some rewards (such as equity in return of investment) to let potential backers find you and invest in your business.

      Social proof
      A highly visible crowdfunding campaign affords you the opportunity of presenting your business to the masses and gain validation for it. Thus, you can test whether the audience likes your product or not, before you start advertising it by judging their response to your crowdfunding offer online.

      The crux – If people show interest in your product and invest in it, it is social proof that you are probably doing something right and have a great product/service in the pipeline.

      Refining your idea
      Feedback is a gift, and when you launch a crowdfunding campaign, you receive plenty of it in the form of queries, concerns and comments. Be smart and use this opportunity constructively to engage with your customers by answering questions and complaints truthfully. Who knows when a great idea might strike you? Besides, such brainstorming can help to iron out the creases in your offering and refine your product further.
      Build a client base
      A crowdfunding campaign helps you build a client base for your product. Each person who invests in your offering is a potential customer. Besides, each investor will share the idea with his or her family and friends, spreading information about your product effectively. Of course, it goes without saying that crowdfunding campaigns also attract a lot of attention from the media.


Crowdfunding by startups

Many startups across the world have raised funds through loyal customers and believers to propel their growth without any monetary impediments or shackles imposed by big financial institutions.

Currently, the legislative regime in Australia allows publicly unlisted companies with less than $25m in annual revenue and assets to issue shares via platforms like Equitise, to raise up to $5 million in any 12-month period.

Most recently, HashChing, Australia’s first borrower-friendly online mortgage marketplace joined hands with Equitise, a crowdfunding platform, to raise up to $5 million by the end of June via crowd-funding. According to the offer, anyone can make an investment in the company with a minimum amount of $250, worth 200 shares. As per legislation, the investment is capped at $10,000 per investor. The offer is open to public on the Equitise platform until 5pm (AEST) on 15 June 2018. Read more about the offer here.

HashChing CEO, Mr Mandeep Sodhi, explains that the fresh capital would be used to increase brand awareness, introduce new technology and expand the team. The crowdfunding campaign is also an attempt to keep HashChing free from the influence of any major bank so that it can maintain its position as an independent and transparent mortgage marketplace.


About HashChing:

HashChing is a borrower-friendly online mortgage marketplace that enables home borrowers to compare broker pre-negotiated home loan deals from over 80 lenders across Australia.

Using sophisticated algorithms and artificial intelligence, HashChing has ushered the concept of on-demand service in the mortgage industry which was previously unheard of in the sector. Since its inception in 2015, HashChing has settled home loans worth [$880 million] for over 40,000 borrowers.

In addition to providing competitive home loan deals and quick, efficient and transparent customer services to its clients, the company provides a hi-tech dashboard to mortgage brokers to manage leads and monitor their performance. The company currently has 700 mortgage brokers on its panel. To ensure transparency, brokers need to maintain a minimum user rating of 4/5 to continue receiving leads via HashChing

Recognised for changing the landscape of the mortgage industry across Australia, HashChing continues to innovate, helping Australians realise their foremost dream of buying a home.

Disclaimer: Like any investment, Crowd-Sourced Funding (CSF) is risky. Investors may lose their money and the business may not achieve its objectives. You should consider the CSF offer document and the general CSF risk warning contained in the offer document in deciding whether to apply under the offer.

 

By Vidhu Bajaj,
HashChing Content Writer

 

* Definition of Crowdfunding, www.merriam-webster.com

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HashChing is helping Australians by providing access to the pre-negotiated home loan deals. Obligation free consultation with one of our partner brokers might save you time, hassle and money.