INDUSTRY FOCUS alternative financing models crowdfunding
INDUSTRY FOCUS alternative financing models crowdfunding
Crowdfunding is a win-win for everyone.
Developers have an alternative funding source and can market themselves to an international community. Investors have access to investment opportunities with good returns that would otherwise not be available.
Realty Africa is a services company in the sub-Saharan region. Their dream is to empower local landowners, developers and architects in sub-Saharan Africa by developing new services and seeking partnerships with other companies. They want to create a total service portfolio that supports local real estate professionals and enables their businesses.
Realty Africa offer a unique platform where property developers can source funding for their real estate projects by marketing them to local as well as international investors: crowdfunding. They strongly believe in the future of the African real estate market and the impact that these developments have on the local community. At the same time, these projects will make excellent investment opportunities.
Africa has a long history of crowdfunding. Whole communities have been known to pool funds to create a building. This approach to financing not only facilitates the funding, but also creates a feeling of mutual ownership and care for the longer term. Realty Africa is enabling the African community to take this concept to the next level by moving the process onto the Internet, with its much wider reach, and thus allowing a national and international investor community the opportunity to participate in projects that would otherwise not be available.
Crowdfunding is a win-win for everyone. Developers have an alternative funding source and can market themselves to the local and international community. Investors have access to investment opportunities with good returns that would otherwise not be available previously.
WHAT IS CROWDFUNDING?
Four different crowdfunding models exist today.
The original concept was donation-based crowdfunding, a way in which people could donate without receiving anything in return. This typically applies to charity causes of different kinds.
The second model to evolve was rewardbased crowdfunding, with platforms such as Indiegogo and Kickstarter. This helps companies collect small contributions from people to develop a product or service. Backers donate to projects that they believe in, developed by companies they want to encourage. In return, they receive a reward in the form of a product or service that has been developed with the funds committed. These rewards are typically called perks, and a company usually offers different kinds of perks at different contribution levels. These platforms are also ideal as a market research tool, as the backers will let you know immediately which perks they like and which they don’ t.
The next model to appear was debt crowdlending, basically a peer-to-peer