Individuals who are new to the Crowdfunding industry will often assume that Crowdfunding is meant to benefit companies that are just starting out or firms that need seed money to launch their project. They might also assume that it is reserved only for very small companies that are trying to grow and expand in midsized companies. This assumption is highly misguided. There are a number of large corporations that have turned to Crowdfunding as a form of business finance. One such corporation is Cloudsona, a Silicon Valley firm that produces wireless wristbands. They wanted to produce wristbands that synchronized with light shows at concerts, clubs and sporting events. The company founders could have easily received funding elsewhere but they chose to use Crowdfunding instead and raised over $55000 from backers online. One may wonder why the founders who have deep rooted connections in Silicon Valley and who no doubt have friends and networks around them with deep pockets would turn to Crowdfunding. Answer is that there are many reasons for an established business to want to use Crowdfunding. In the war between traditional investment and Crowdfunding, finance seekers are opting to go with Crowdfunding as their preferred form of raising funds because:
It has been noted that established companies may achieve more success with Crowdfunding because 1. They already have a recognizable name and are well known. Therefore, crowd funders may find it easier to trust them. 2. They may be in a position to offer the backers more incentives as compared to smaller firms, in return for their donations. As the Crowdfunding industry grows, more and more medium sized and larger companies are finding it a better way to raise funds for their projects. To learn more about this, read how Big Brands are hopping into Crowdfunding.