What exactly is crowdfunding? It is a financing method for ventures and firms seeking funds from the public and investors, to finance a project or initiative. Investors receive interest payments or equity shares from investing in a company on a crowdfunding platform.Equity-based crowdfunding is the type of crowdfunding that is an investment. Startups and small businesses can choose to offer equity shares to those who invest in them.
Below are some of the key features that every investor should take into consideration, as they can greatly impact your returns on investment.For almost every investor, the fees involved can be one of the most crucial factors when it comes to making a decision between brokerages, investing platforms and more. Fees can be a major hassle, especially when there are so many different types of fees imposed on every transaction.
Most crowdfunding platforms in Singapore come with investor service fees which are associated with investing in a campaign on the platform. They are usually in the range of 15% to 20% of interest earned. There are also notable exceptions, such as the platform KapitalBoost, which imposes a 0% investor service fee.
As for the default amount, a decisive factor would be the crowdfunding platform’s average default rate. Due to the fact that crowdfunding platforms are different from the typical online brokerages which allow you to invest in stocks, equities and more from global listed companies, many crowdfunding platforms offer investment opportunities for smaller ventures such as startups and SMEs.