What Does Crowdfunding Mean?

What Does Crowdfunding Mean?

In today’s blog post, we’re going to talk about a completely different topic, instead of the influencer marketing industry and the new updates about social media trends.

If you follow the business world in general, you may have heard of the concept of start-up. Start-ups are the first step for a small group to corporate and grow their ideas to solve a problem. Most of the time, start-ups stay in the idea stage because there is not enough capital to feed the startup. Angel investors or investment companies can make large investments in startups and this can elevate the way for that startup, but investment companies and angel investors also have a desire to control the company. Startups funded in this way are not completely under the control of the idea owner and have to listen to those who invest in it. Since many entrepreneurs in the world did not like this situation, the need for a new and different funding mechanism emerged. Within start of the 2010s, a new method which is crowdfunding appeared as a popular alternative to venture funding.

Crowdfunding allows large numbers of people to invest in small amounts to bring a project to life. In 2015, a total of 34 billion USD was funded in the world with Crowdfunding. To realize crowdfunding process, a platform where investors and projects meet, should be formed. These platforms receive a percentage of the commission on the money collected by initiatives or projects. The most famous platforms in the world in this regard are Kickstarter, Indiegogo GoFundMe and Syndicateroom. However, the number of such platforms is increasing day by day with the popularity of crowdfunding.

ILONSI AB, one of the companies of the ILONSI Group, managed to receive an investment of 3 million SEK in the spring of 2020 through the crowdfunding company FundedByMe in Sweden, which is listed on the Swedish stock exchange. Later, ILONSI AB signed an agreement with FundedByMe to find investments for other projects by selling the shares of startups on the FundedByMe platform through influencers and created a new model in Sweden. We managed to raise a total of SEK 30 million to more than 10 companies. With the end of 2021, ILONSI AB is open to investment for the second time on FundedByMe and is waiting for the investments of interested investors.