turn to crowdfunding to let individual investors help finance the project. The process enables investors to invest in real estate without owning, financing, or managing properties.
Crowdfunding with IRAs
It would be an understatement to say the financial landscape has changed in the past decade. Businesses accept payments with Square, investors buy stocks through apps while listening to podcasts, and cryptocurrency went from geek niche to cultural phenomena overnight. Alongside these is another monumental shift: crowdfunding. There are multiple types of crowdfunding, each with a slightly different purpose: · Rewards-based crowdfunding: This type of crowdfunding is the most well-known, thanks to Kickstarter. In rewards-based crowdfunding, people invest in a company in exchange for a reward, typically a discounted final product or service. · Donation-based crowdfunding: This is charitable crowdfunding, in which people donate their money expecting nothing in return. Donation-based crowdfunding is typically used by charities looking to fund a project, or to help with medical bills or recovery expenses via sites like GoFundMe. · Debt-based crowdfunding: This type of crowdfunding is used when a company needs a large sum of money to cover some kind of expenses or acquisition. In exchange for donations, the recipient typically promises some kind of repayment to those donating. · Equity-based crowdfunding: In equity-based crowdfunding, investors put their money into a company in exchange for shares. This type of crowdfunding gives startups the chance to
50
Powered by FlippingBook