What are the crowdfunding disadvantages?
What are the crowdfunding drawbacks versus the benefits? The providers of crowdfunding in the Netherlands (https://www.eyevestor.com/onderwijs/bedrijven/crowdfunding-nederland/) can tell you a lot about the benefits. But, what about the downsides to consider?
Downsides of crowdfunding
There are also a few drawbacks to crowdfunding for entrepreneurs. Only by listing the pros and cons you will get a complete picture.
For example, keep in mind these crowdfunding drawbacks:
- Less flexibility
Crowdfunding usually involves a loan. The private individuals bring together money, which they collectively lend to you. That loan that you take out as a company makes you a lot less flexible. It limits your opportunities to grow, because it is important to first repay the loan. - High monthly costs
The repayments and interest that you pay lead to high monthly payments. You cannot use that money to grow. Instead, you incur costs for financing, costs that also take effect immediately the moment the crowdfunding is completed. - Only finished when the target amount is reached
Finally, in crowdfunding it is important to reach the target amount, and thus complete the financing. Are you unable to complete the last stretch? Then you run the risk that the full financing will not go through.
Before you opt for it, make sure you know the drawbacks of crowdfunding. Only in this way do you get a complete picture of the possibilities, and you also know what the risks are.
Crowdfunding disadvantages: Choose sharefunding as an alternative
And are you curious about an alternative because of the disadvantages of crowdfunding? Thanks to sharefunding (https://www.eyevestor.com/onderwijs/bedrijven/sharefunding/) you avoid some of the most important challenges. For example, it ensures that you receive investments, instead of a loan. The private investors believe in your company, in your ambitions and the growth plans you have. They also make this possible, because you do not have to pay interest or repayment.
Sharefunding is based on equity, rather than new debt. You do not take out a loan, but receive investments from a large group of (private) ambassadors. They collect money that you can use to realize growth.
So do you have big plans for your company and are you looking for financing? If the bank does not cooperate or you do not want to cooperate with it, crowdfunding can be a good choice. Make sure you also look at the disadvantages in advance, so that you are well aware of them. And immerse yourself in sharefunding, for example. This is an attractive alternative for many companies, thanks to committed investors rather than private lenders who want to make a quick return.